The British firm reported the highest annual profits in its 115-year history, sparking anger among those struggling to pay their energy bills.
Energy giant Shell posted record annual profits of nearly $40 billion after oil and gas prices surged following Russia’s invasion of Ukraine last February.
The British company’s 2022 profits were the highest in its 115-year history, a milestone that angered many Britons struggling with a cost-of-living crisis largely fueled by high energy bills.
Shell’s annual profits jumped to $39.9 billion, more than doubling from a year earlier and surpassing the previous record of $31 billion in 2008.
The earnings mirrored those reported by the company’s US rivals earlier this week and are sure to increase pressure on governments to further raise taxes on the sector.
The results demonstrate Shell’s “capacity to deliver vital energy to our customers in a volatile world,” new CEO Wael Savan said in a statement.
Russia’s war in Ukraine has rattled global energy markets and Shell, like its rivals, has benefited from its large global footprint and leading commercial operations.
Governments struggling with rising energy bills have responded by imposing windfall taxes on the energy sector, including in the UK.
Shell said it expects about $2.4 billion in levy-related costs in 2022. In early January. the company has announced it will pay UK tax for the first time since 2017.
“It’s time to make polluters pay”
But critics say the UK’s Conservative Party government should tighten its regime of windfall taxes on energy firms’ profits after Shell’s big profits were announced.
“As Britons face a 40 per cent energy price rise in April, [Prime Minister] Rishi Sunak is letting fossil fuel companies make huge profits off the hook by refusing to properly tax windfall profits,” Ed Miliband, the opposition Labor climate and net zero secretary, said in a post on Twitter.
As it currently stands, companies have to pay 35 per cent tax on profits made from oil and gas production in the UK. However, this does not apply to other activities, such as selling fuel at gas stations or oil refining.
The scheme also offers businesses big savings if they invest in fossil fuel mining in the UK – for every £1 ($1.23) they spend on it, they can claim 91p ($1.12) back in tax relief .
Caroline Green, former head of the UK Green Party, said the government was “complicit” with energy firms, which she accused of “polluting our planet”.
“For a livable future, we must ditch fossil fuels forever,” she said in a post on Twitter.
Greenpeace, an NGO, said it was “time to make polluters pay”.
“While Shell is counting its record profits, people around the world are counting the damage from record droughts, heat waves and floods – which Shell’s business model is driving,” the group said.
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