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Sunday, May 26, 2024

PM under pressure to expand windfall tax

New Prime Minister Rishi Sunak is already being urged to expand the windfall tax on energy giants.

Shell swerved the bill despite doubling its profits amidst soaring oil and gas prices.

The multinational made almost £10 billion earlier in the year and is on track for a record year for profit.

But Shell says it shouldn’t pay the windfall because it made investments worth $400m in the UK during its third quarter and this meant, it made no profit here.

The Energy Price Levy – or windfall tax – on the profits of energy firms was announced by Sunak when he was chancellor. He had said it would raise £5 billion in its first year.

Climate activists and opposition MPs are urging the Prime Minister to go further on his windfall tax as oil and gas giants see profits soar over Russia’s war in Ukraine.

The Energy Profits Levy also has a measure that allows energy companies to apply for tax savings worth 91p of every £1 invested in fossil fuel extraction in the UK.

Downing Street said that any changes to the windfall tax would be a matter for Chancellor Jeremy Hunt’s autumn statement.

Oil and gas prices began to rise after the end of Covid lockdowns but have surged since February after Russia’s invasion of Ukraine, resulting in bumper profits for energy companies.

Higher oil and gas prices has also fuelled the rise in energy bills for both households and businesses.

The government is limiting gas and electricity bills through the Energy Price Guarantee scheme but instead of lasting for two years as originally planned, it will now end in April.

Picture by Simon Walker / HM Treasury, OGL 3, https://commons.wikimedia.org/w/index.php?curid=124686916

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