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Petrol firms making £3m every hour
Jonathan Prynn and David Williams29 Apr 2008
Shell and BP were accused of profiteering today as they revealed combined profits of £7.2 billion - made in just three months.
The record profits, equivalent to £3.3 million an hour, come as soaring oil prices push petrol towards a new high of £5 a gallon of unleaded or 109.9p a litre.
There was delight in the City as Britain's two biggest oil companies unveiled a 26 per cent jump in the money they made for shareholders in the first quarter of the year.
But Gordon Brown said he was "very worried" about the impact of rising oil prices on families and pensioners. And Sarah Teather of the Liberal Democrats said: "Many people will feel deeply uncomfortable that some of the world's wealthiest companies are experiencing a profit surge at a time when household budgets are under tremendous pressure.
"Consumers are already facing huge price hikes in food and utility bills. Now petrol prices seem to be rising while oil companies' profits are going sky high. Oil companies should not be profiteering while so many are struggling to make ends meet. We need to ask whether the price rises being passed on to consumers are proportionate."
Sheila Rainger of the RAC Foundation said: "Motorists will be quite angry at these high profits at a time when they have been struggling for months with very high pump prices.
"They are also angry that three quarters of the price of a litre is duty and VAT that goes straight to the Government."
Edmund King, AA president, said: "There is no doubt that some garages have been profiteering too. One in Tunbridge Wells is charging 1.29 a litre and his prices have gone up 10p in the last week. There is no reason for that."
The biggest increase in profits came from BP, which made £3.31billion, 48 per cent higher than the first quarter of last year. Shell's profits of £3.92billion were 12 per cent higher.
Jason Kenney, oil analyst at ING, said of the Shell results: "They look like blow-away numbers. I can't see anything in particular that is unusual, they've just done well."
Rising oil prices are good news for the Treasury as its VAT takings from petrol rise in line with its retail price. The Government is estimated to be getting £123 million a month more from VAT on fuel than a year ago.
Brendan McLoughlin of petrolprices.com said: "Both oil companies and the Government are doing very nicely out of this while the rest of the country is left out of pocket and in some case out of fuel."
Prices at the forecourt have been forced to record levels in part by the oil refinery strike at Grangemouth with average prices around Britain rising for 15 days on the trot.
But the main reason is the price of oil, with the head of Opec issuing a grim warning that there could be more pain to come with nothing to stop the price of a barrel of oil rising as high as $200.
LORRY DEMO CAUSES HAVOC ACROSS CITY
LORRY drivers jammed central London today as they staged a wildcat protest against soaring fuel prices.
Two convoys totalling more than 40 lorries converged on Park Lane where they mounted a show of strength before heading for Parliament Square to deliver demands for lower fuel taxation to Downing Street.
Travel data firm Trafficlink said the rolling protest caused havoc at rush hour as one convoy rolled into London from the south and another from the west.
Peter Knight of drivers' group Transaction said the protest would culminate when the convoy left the city up Edgware Road and drove around the M25.
Reader views (3)
HM revenue and customs took home ~27bn in petrol and fuel duties last year and that's excluding VAT.
That works out around £3m an hour as well.
I know who I'd rather wire money the money to - Shell and BP. Time to wake up to how much tax we all pay.
- Anon, UK, 30/04/2008 19:02
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If the Oil companies are making £3 million an hour. Good luck to them. They are the ones who take all of the risk.
The petrol price is high because of Government duty and vat. In the USA the price is less than half of what we pay. Even if oil went up to $200 a barrel. Americans would still be paying less than the equivalent to £4 a gallon.
- H Henderson, Harrow, 29/04/2008 15:24
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An increase in income tax would create a furore. Increases in the price of petrol and the tax thereon seem to be accepted without any real comment. When will people wake up to the fact that the government apply some form of tax to nearly everything we earn or spend.
- Bruce Page, London, 29/04/2008 13:12
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