BP profits surge amid calls for windfall tax

Oil giant BP has reported its highest profit for eight years, amid calls for a windfall tax on energy companies.

BP posted a profit of $12.8bn (£9.5bn) for 2021, and it made more than $4bn in the final quarter of the year when oil and gas prices surged.

The jump in energy prices is leading to big increases in gas and electricity bills for households.

Last week, Labour MPs said energy firms that had profited from higher wholesale prices should pay more in tax.

The very same energy prices that have spelt crippling bills for users have prompted BPs boss to describe his operation right now as a "cash machine". A combination of resurgent demand and geopolitical tensions means wholesale gas prices are five times higher than before the pandemic - while oil prices have almost doubled.

And there's more rewards to be reaped: analysts think BP and Shell could make almost £40bn in profits this year, enough to cover the energy bills of the majority of UK households, renewing calls for a windfall tax. But the Chancellor is unconvinced, fearing that it could damage investment in lower carbon forms of energy, particularly given that energy giants' profits, tied as they are to global prices, are very volatile.

BP's plan to invest in renewables are among the most ambitious in the sector, with an aim to increase spending on low carbon technologies 10-fold, to almost a third of its budget in 10 years. And in the meantime, there are concerns that the UK needs to do more to ensure to boost its own gas supply; at present, more than half our demand is met by imports.

But critics say that BP's renewables investment comes from a very low base, and could go further. Yet there could still be scope, given the scale of this windfall - to help foot the bill for help for struggling customers