Shell profits soar to $9.1bn amid ever growing calls for windfall tax

Petrol retailers have defended the speed of pump price increases and urged the chancellor to help motorists absorb record bills by cutting VAT on fuel.

Shell has reported a record quarterly profit of $9.1bn for the first three months of the year, piling more pressure on the government to implement a windfall tax to fund measures to tackle soaring household energy bills.

The first-quarter profit was boosted by a sharp rise in oil and gas prices, and compared with $6.3bn of profits in the final three months of 2021 and $3.2bn during the first quarter of last year. It was above analysts’ expectations of first-quarter adjusted earnings of $8.7bn.

Campaigners have called for a one-off levy on companies benefitting from soaring oil and gas prices to fund government initiatives to reduce the burden of rising bills.

Shell said it had taken a $3.9bn hit after it ditched its Russian investments after the invasion of Ukraine in February.

The UK oil firm is negotiating an exit from the huge Sakhalin-2 liquefied natural gas project north of Japan, in which it has a 27.5% stake. It is also divesting Nord Stream 2, a venture with the Russian gas company Gazprom.

Shell’s update comes after BP reported its highest quarterly profit in more than a decade on Tuesday. Its profits more than doubled to $6.2bn, and sparked a clamour for a windfall tax.

The government has resisted calls for such a levy. Boris Johnson has said it would discourage oil and gas producers from making investments into domestic energy.

But BP’s chief executive, Bernard Looney, has admitted none of the £18bn UK investments the company is planning would be dropped if a windfall tax were imposed.

Reacting to the bumper profits announcement, Friends of the Earth campaigner Connor Schwartz, said: “While giant fossil fuel firms like Shell post massive profits, millions of people are struggling with sky-rocketing energy bills and living in heat leaking homes.

“A tax on these excess profits could help pay for a nationwide free insulation programme, rolled out street-by-street, focussing on those most in need first.

“There’s no time to waste. The quickest way to bring down energy bills for good is to insulate our homes and invest in cheap and reliable renewable power. And it starts with a windfall tax on fossil fuel companies.”