Shell makes record profits - calls mount for a windfall tax

Shell has announced record profits as the oil giant benefits from high global oil and gas prices which have increased the supernormal profits from their exploration, extraction and refining businesses.

They made £8bn profits in the third quarter of 2022, which equates to a profit of £3.6 million every hour. In the same period in 2021, profits were £4.1 billion. This takes their total profits in the first nine months of 2022 to just £30 billion. 2022 might turn out to be the most profitable year in their history.

Shareholders stand to gain in two ways. First, dividend payouts are forecast to rise 15% this year. And second, Shell is committed to a $4 billion share buy-back programme which usually has the effect of lifting the share price giving existing shareholders the opportunity of making a capital gain.

These abnormally high profits increase the political pressure on the UK government to introduce a windfall tax on energy companies as part of the strategy of closing the fiscal “black hole” and raising tax revenues to help limit the need for public spending cuts.

The Shell CEO is quoted as saying that it is “right” that governments seek to impose windfall taxes on the profits of energy firms to help “those who need it most”.

The Times reported today that oil and gas groups around the world stand to make $2 trillion in windfall profits this year because of surging market prices. This forecast comes from the International Energy Agency.

More here from the Financial Times

Click here for the details of Shell’s 3rd quarter announcement