A BP gas station in Madrid, Spain.
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LONDON – British oil giant BP on Tuesday reported record second-quarter profits, benefiting from a rise in commodity prices.
The British energy giant posted a $8.5 billion gain on underlying replacement costs in the second quarter, used as a proxy for net profit.
That compared to $6.2 billion in profit for the first three months of the year and $2.8 billion for the second quarter of 2021. Analysts had expected BP to report a $6.3 billion profit for the first quarter. report, according to Refinitiv.
BP also announced a 10% increase in its quarterly dividend payout to shareholders, raising it to 6,006 cents per common share.
Shares of BP rose 4% during early morning deals in London, trading near the top of the pan-European Stoxx 600. The share price is up more than 23% so far.
BP’s results once again underscore the stark contrast between Big Oil’s profit bonanza and those grappling with a deepening cost of living crisis.
The world’s largest oil and gas companies have broken record profits in recent months, following a surge in commodity prices following Russia’s invasion of Ukraine. For many fossil fuel companies, the immediate priority seems to be returning cash to shareholders through buyback programs.
Last week, BP’s British rival Shell reported record second-quarter results of $11.5 billion and announced a $6 billion share repurchase program, while British Gas owner Centrica restored its dividend after a huge jump in profits in the United States. first half year.
Cost of living crisis
Environmentalists and union groups have condemned Big Oil’s soaring profits and called on the UK government to impose meaningful measures to lower the cost of rising energy bills.
“Every family should get a fair price for the energy they need. But with utility bills rising much faster than wages, high profits are an insult to families struggling to make ends meet,” said Frances O’Grady, secretary of the trade union congress in a statement. .
“To deal fairly with the cost of living crisis, we need to stop price rises and profits. Ministers need to do more to raise wages across the economy. And we need to put energy retail companies into state ownership so we can cover basic utility bills. to lower.” energy needs,” O’Grady said.
Last month, a cross-party group of UK lawmakers called on the government to step up support for households to pay rising energy bills and outline a nationwide plan to insulate homes.
A price cap on the most commonly used energy tariffs for consumers is expected to rise by more than 60% in October as a result of rising gas prices, bringing the average annual dual-fuel household bill to more than £3,200 ($3,845).
National Energy Action, a fuel poverty charity, has warned that if this happens, 8.2 million households – or one in three British homes – would find themselves in energy poverty. Fuel or energy poverty refers to when a household cannot afford to heat their home to a sufficient temperature.
“Ministers must impose a much stricter windfall tax on huge profits from oil and gas companies. It is unimaginable that these companies are raking in such huge sums amid a cost of living crisis,” said Sana Yusuf, energy activist at Friends of the Earth , said in response to BP’s earnings.
“It’s amazing that energy efficiency has been given such a low priority. A nationwide insulation program would cut bills, reduce energy consumption and reduce climate-changing emissions,” Yusuf said.
The burning of fossil fuels, such as oil and gas, is the main cause of the climate crisis and researchers have found that fossil fuel production is “dangerously out of step” with global climate goals.
During his June speech, UN Secretary-General Antonio Guterres called for an end to fossil fuel funding, describing new funding for fossil fuel exploration as “insane”.