Shell posts record Q1 profits as oil prices soar

Shell posts record Q1 profits as oil prices soar

Energy giant Shell reported record first-quarter profit after a spike in oil prices

Shell Reports Record Q1 Profits as Oil Prices SoarBy DANICA KIRKAAssociated PressThe Associated PressLONDON

LONDON (AP) — Energy giant Shell reported record first-quarter profits after a spike in oil prices, fueling calls for the British government to impose a windfall tax on energy companies to to help consumers struggling with the soaring cost of living.

London-based Shell said adjusted profit – which excludes one-time items and changes in inventory value – reached $9.1 billion, compared with $3.2 billion in the same period last year. latest. That beat analysts’ expectations of $8.2 billion.

High oil and gas prices, partly due to uncertainty over supplies from Russia, are boosting profits for major energy companies and fueling inflation around the world. In Britain, where households are facing the biggest drop in living standards on record, it has sparked calls for a special tax on the income of energy companies to help consumers.

Prime Minister Boris Johnson rejected calls for a windfall tax on Wednesday, saying it would reduce investment in Britain just as the country tries to diversify its energy industry and increase production from renewable sources. renewable. But opposition parties stepped up pressure after Shell’s earnings report.

The government’s “refusal to tax the super-profits of energy companies is completely unforgivable when people are too terrified to heat their homes,” said Ed Davey, leader of the Liberal Democrats. “This one-off tax would raise billions of pounds that could help vulnerable families pay their energy bills now.

Brent crude, a benchmark for global oil prices, averaged $102.23 a barrel in the first quarter, up 67% from the same time last year.

British media is rife with stories of people being forced to skip meals or go into debt as they struggle to heat their homes after a 54% increase in household energy prices took effect the 1st of April. Even before these increases, inflation accelerated at 30 years. maximum of 7% in March.

Shell rival BP reported its highest quarterly profit in more than a decade on Tuesday. The London-based company said adjusted profit rose to $6.2 billion in the first quarter from $2.6 billion in the same period last year.

Michael Hewson, chief market analyst at CMC Markets UK, has slammed politicians for “grandstanding” with calls for a windfall tax, pointing out that Shell last month announced plans to invest £25bn ($31 billion) in renewables in the UK. a commitment to invest £18 billion in energy in the UK this week.

“That’s a lot more than a windfall tax would raise and would probably be better spent,” Hewson said.

Shell said on Thursday it would need a $3.9 billion charge to cover the cost of exiting investments in Russia, which it pledged to do after the invasion of Ukraine.

First-quarter net income, which includes these one-time items, was $7.3 billion, compared to $5.8 billion in the same period last year.

“The war in Ukraine is above all a human tragedy, but it has also caused significant disruption in global energy markets and has shown that safe, reliable and affordable energy simply cannot be taken for granted.” , CEO Ben van Beurden said in a statement. . “We have engaged with governments, our customers and our suppliers to overcome difficult implications and provide support and solutions where we can.”

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