Energy prices boost BP profits

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The oil giant posted half-year profits of 13.44 billion US dollars (£6.75 billion) - 23% ahead of the previous year - as the firm reaped the benefit of record prices.

Between April and June, the company made underlying profits of 8.6 billion US dollars (£4.3 billion) - almost £2 million an hour and 56% ahead of the same period last year.

The results - which shattered City expectations - were driven by soaring crude oil, which finished June at nearly 144 US dollars a barrel.

But motorists suffered an average 10p rise in the price of a litre of petrol to 118.2p over the period, with average diesel prices more than 14p up to 131.6p, the AA said.

BP's exploration and production business boosted profits 55% "primarily due to higher oil and gas realisations" - higher selling prices.

While the oil major will plough around £11 billion back into capital expenditure and exploring for new sources of oil and gas this year, the profits will add to anger among hauliers and drivers over soaring costs.

Union leaders have called for a windfall tax on the profits of both BP and fellow major Royal Dutch Shell. Tony Woodley, joint leader of Unite, said: "While ordinary people struggle to make ends meet, BP's boardroom is wading through knee deep profits. It is high time our Government moved to stop the fuel corporates picking the pockets of the poor and needy."

BP, however, says that it makes less than 1p in profit on every litre of petrol it sells at its 1,300 filling stations across the UK. In response to calls for a windfall tax, the company adds that it paid 14.5 billion US dollars (£7.3 billion) in taxes worldwide last year - of which 2.33 billion dollars (£1.17 billion) was in the UK.

In refining and marketing, earnings for the three months to June 30 were down to 539 million US dollars (£271m) from 2.74 billion a year earlier. It said higher energy costs continued to impact margins in the division despite an improved performance from its US refineries, which have struggled in recent years.