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Motorists fury as 'profiteering' Shell and BP post record profits of more than £3million an hour... as petrol prices near £1.50 a litre
Last updated at 16:52pm on 30.04.08Motorists yesterday accused oil firms of "profiteering" as Shell and BP revealed record profits gushing in at more than £3million an hour.
The two companies announced combined profits of £7.2billion for the first three months of the year.
At the same time petrol hit a record £5 a gallon (£1.10 a litre), oil nudged an unprecedented $120 a barrel and fuel protesters took to the streets.
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Lorry drivers protest about the tax on petrol as they leave a Kent service station
The Government was also criticised for taking nearly 70p in every pound paid by motorists at the pumps.
Motoring groups said both the oil companies and the Government were “laughing all the way to the bank”.
The oil firms' profits were announced just as the 48-hour strike by 1,200 workers at the Grangemouth refinery in Scotland ended after cutting off a third of the UK's oil and gas supplies.
This cost the economy more than £100million and led to fuel shortages, panic buying and rationing.
There are several more fuel price increases in the pipeline.
Petrol retailers predict unleaded will rise by 2p a litre (to £1.12p) within days, and another 5p by summer. Some analysts predict it could top £1.50 a litre by September.
Yesterday Gordon Brown said he was "very worried" about the impact of rising oil prices on families and pensioners.
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The convoy heads for London's Park Lane
But critics accused the Premier and his Chancellor of shedding crocodile tears, pointing out that the Government itself is the other main "profiteer" from rising oil prices.
Accountants Grant Thornton said the Government had enjoyed a £4billion windfall last year from the boost to North Sea Oil and Gas tax - expected to increase to nearly £5billion this year.
The Government also gains because the Treasury's-VAT takings from petrol and diesel rise in line with prices at the pumps.
The accountants estimated the Government will get £123million a month extra from VAT on fuel than a year ago.
"It's big bonanza time for the Government while everyone else suffers," said senior tax partner Maurice Fitzpatrick.
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Cars queue for petrol at a BP station. The firm announced record profits
Motorists face more pain at the pumps in the autumn when a 2p-a-litre tax hike, deferred from the Budget, is imposed.
Mr Brown said the Government had frozen fuel duty and was also pressing for Opec, the oil producers, to get the price of oil down.
But AA president Edmund King said motorists were still the biggest losers.
"The motorist feels somewhat battered from all sides, seeing the oil companies going off with cash in their pockets and the Treasury filling its coffers," he said.
"It's the ordinary motorist that's bearing the brunt of this while the oil companies and the Government are laughing all the way to the bank.
"We also believe that some garages have been profiteering."
He said one garage in Tunbridge Wells had increased the price of diesel from 120.9p to 129.9p a litre in a week. "There is no justification for that," he added.
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Protestors block a section of Park Lane in London
The AA said filling up the average Ford Mondeo with petrol costs £8 more than a year ago - or £12 for diesel.
Fuel protesters campaigning against record diesel prices took to the streets of London yesterday.
Led by a convoy of lorries with horns blaring, hauliers left a coffin symbolising the death of haulage businesses at the Houses of Parliament.
They are angry that diesel prices have surged by 30 per cent in a year, meaning it costs £1,000 to fill a delivery truck.
Reader views (13)
If there were a concerted media campaign on the subject of fuel poverty, profiteering and tax (especially before a presumed election) there would be a more positive response from GB than mere patronising platitudes. Any Government in power needs the media on its side, and when the media goes against them big time, the message becomes clear - listen or go under. If that doesn't happen, then poll-tax style riots will be next or guerilla blockades by truckers (as happened in France) may be seen in the UK. This government talks big on addressing and aiming to relieve fuel poverty, yet freely increases VAT on fuel and does nothing to combat the massive greed of the utility companies. Just whose side are you on GB?
- Joan, London, England
Though it is right to compare UK prices with Europe (and I agree we are high) comparisons with the US are meaningless. The provision of cheap oil in the US has created a dependency that has caused huge environment impact and led to war in Iraq.
One thing to consider on fuel pricing is that for many of us we have a choice... high fuel prices have changed my behaviour and many people I know....for example people that 6 or 7 years ago would not consider anything less than a 3 litre V6 are now buying 1.2 litre cars for everyday use and halving their fuel costs.
- Martin Clerkenwell, London
They make less than 10% margin on their overall sales numbers - far less than most commercial companies. The profit numbers may be large but their sales are hundreds of billions of pounds. And the government takes far more money in tax than the oil companies do in profit.
Taking into account tax, the oil companies probably make less than 3% on the pump price. Saying that wouldn't be headline would it?
- Graham, Fleet
Mark, you have that wrong, the government rakes off 80% in taxes. It will be interesting to see what happens this winter, already the gas futures market (which gas companies purchase through) is already up 25%. That means you will be paying over 25% more for gas and electricity before the end of the year. Bang goes the Government fuel poverty targets as a lot of us will be caught up in it.
- Paul, London
A US gallon is smaller than a UK gallon. 1 US gallon is 3.78 litres, whereas a UK gallon is 4.5...
- Daizy, N England
Why would the government put a cap on the price the oil companies charge? They themselves are raking off over 50% in taxes from the money at the pumps.
- Mark Yercards, Islington
If Gordon is very worried, then why doesn't he lower fuel duty? He is already collecting more tax than planned due to the high oil price. He collects more tax on the crude oil and gas flowing from the North Sea, he collects more VAT at the pumps(charged not just on the cost of fuel but also on the fuel duty) and from the taxes paid by the oil companies on their increased profits. He should be able to drop the price of diesel and petrol by a significant amount and still remain in pocket by merely dropping the fuel duty.
I don't think he will because I do not believe he is worried at all. The UK now has the dearest road fuel in Europe, not because of the price of oil but because of the extortionate taxes collected at the pumps by the Government.
- Des Breen, Worcester
In the US - having spent the last 3 weeks there, the average price is actually $3.30 - $3.70 in the South East! Still about £3.50 a gallon cheaper than here. The Government currently take about 77p per litre in duty and VAT - rip-off Britain yet again. Labour out!
- Gary, Wycombe
Fly - US consumers already pay USD3.50 per gallon and they do moan about it.
- Dave Davies, Basingstoke, Hants
Fly - you muppet - I think you will find that the US public do pay $3 for petrol....in fact it's over $3.50 per gallon in the US. This Labour government takes close to 60-65p per litre in taxes (the US government take closer to 12-15p) - I think you will find that's where the anger should be directed. We shouldn't complain too much about taxes, we all have to pay our way - but we do have the right to complain when we see the inefficiencies and general incompetence of our bloated public sector and see that this Labour government, like most previous Labour governments, has squandered the tax revenue it has taken from the people.
- Dc, London
How about a little perspective? BP's share price is considerably lower than it was two years ago.
- Oliver, Exmouth UK
Civil unrest is required!
You can't rely on Broon and his chums to do anything about it as they're coining even more money(and probably claiming their petrol on expenses).
For real change to take place we need to be out on the streets causing trouble and making the gov look stupid(er).
- Guy, London
So the country is held to account by 1200 pickets, a greedy government and profiteering oil companies. What the hell is going on England? At what point do we the Public say enough is enough? Imagine the US public being told they had to pay $3 for petrol.
- Fly, London
