NI customers ‘will be angry’ at oil giant BP’s ‘enormous profits’ as Consumer Council calls for action

Northern Ireland consumers grappling with rising energy costs will be angered by reports that oil giant BP’s profits have tripled, the Consumer Council said.

eter McClenaghan, director of infrastructure and sustainability at the Consumer Council, said it was clear steps needed to be taken to regulate “huge profits” being reaped by big energy companies.

BP has said its second-quarter earnings more than tripled to a 14-year high as it joined rival Shell in a bid to benefit from rising oil and gas prices.

They reported that underlying replacement cost profits beat expectations, jumping to US$8.5 billion (£6.9 billion) for the three months ended June 30, equivalent to $2.8 billion ( £2.3 billion) is more than a year ago.

Other big energy companies, including British Gas owner Centrica, also reported huge gains last week.

Mr McClenaghan said: “Many consumers in Northern Ireland will be upset when they see the profits being made by global multinational energy companies as so many people here grapple with the cost of fuel and heating oil. Filling up a car now costs almost £100.”

He said the Consumer Council is working with the Competition and Markets Authority, which is beginning a detailed review of the fuel price market.

Early results have shown a contrast in Northern Ireland, where local petrol and diesel dealers do not appear to have made unreasonable profits over the past 12 months.

He added that the Consumer Council also works closely with the Business Department and the Supply Regulator, which regulates the companies that distribute and supply natural gas and electricity in Northern Ireland, to ensure they don’t make excessive profits.

“However, there are clearly problems in the energy supply chain outside of Northern Ireland. The CMA has highlighted that profits from refining oil into gasoline and diesel appear to have increased and we are now seeing global companies like BP posting huge profits. Given these factors, we understand why some EU countries have chosen to introduce windfall taxes on companies that generate higher-than-expected profits.”

Despite its record profits, BP has warned there will be no cut in energy prices over the summer and forecast that disruptions from Russia will keep crude oil and gas prices high in the third quarter.

Households across the UK have now been warned to face annual energy bills of £3,615 this winter, according to energy adviser Cornwall Insight.

Joshua Warner, market analyst at City Index, said this is a “recipe that should continue to bring record earnings to BP and other oil and gas giants.”

The UK government is introducing a windfall tax on energy company profits, but has been criticized for offering strong incentives for companies to invest in oil and gas while not incentivizing green investments.

Another factor was that BP’s half-year results were hit by a huge £24.4bn (£19.9bn) loss from the company’s decision to take a stake in response to the war in Ukraine to sell almost 20% of the Russian oil producer Rosneft.

That means a year earlier statutory replacement costs of $15.4bn (£13bn) versus profits of $5.7bn (£4.7bn).

BP CEO Bernard Looney has claimed the company is finding a way to “perform as it changes”.

“Our employees worked hard throughout the quarter to solve the energy trilemma – secure, affordable and low carbon energy,” he said.

“We’re doing this by providing the oil and gas the world needs today – while investing to accelerate the energy transition.” NI customers ‘will be angry’ at oil giant BP’s ‘enormous profits’ as Consumer Council calls for action

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