Energy companies must step up to help ease the cost of living crisis
The news that BP profits have tripled to almost £7 billion between April and June this year has been strongly criticised in the context of many families struggling with the rising cost of energy bills, the economic fallout from the war in Ukraine, and soaring prices for motorists at the pumps.
There is a strong sense in Britain and around the world that everyone – businesses big and small and the public at large – are tightening their belts due to the spiralling cost of living caused by global hyperinflationary pressures and geopolitical factors. However, the fact that BP has made more money, not less, during this difficult time, in contrast to the vast majority of other businesses and individuals, makes the situation all the more perverse. Staggeringly, this was the oil and gas producer’s highest profit in 14 years, and a US$6.1 billion increase on the same period last year.
It is disappointing that oil and gas companies are making such profits on the backs of people who are finding it hard to make ends meet
The huge increase is, of course, due to higher oil and gas prices caused by the conflict in Ukraine, however it feels wrong that companies are benefitting from this international catastrophe at the expense of consumers. BP has exploited motorists to maximise profits by putting up prices quickly as oil became more expensive, then acting slower than rivals to lower them again after the cost fell last month. It is inexplicable that BP is making huge profits – more than could have been imagined – yet is not passing any of this on to consumers at the pump when they know how tough things are for people at the moment.
BP and other oil and gas companies need to be responsive to the British market they are operating in and from which a great deal of their profits derive. The public feel this especially strongly in relation to the big British oil and gas giants who are domiciled in this country. It is quite incredible that energy companies are making more money than they know what to do with, yet this is not being reflected in their offering to consumers.
Britons are facing household energy bills of over £4266 a year from this winter, meaning they will struggle to heat their homes. It is disappointing that oil and gas companies are making such profits on the backs of people who are finding it hard to make ends meet and to pay their bills. In this regard, BP are far from the only culprits and this applies to all of the big players.
The government should be commended for acting decisively in response to the needs of the British people by introducing the Energy Profits Levy. This is a clear signal from government that it expects energy companies to step up and meet their social obligations in these challenging times. I am unequivocally of the view that energy companies have a moral duty to help tackle the high cost of living, and that oil and gas companies must do much more than they are currently doing. This includes re-investing more of the profits in renewable energy to ensure that we have secure, affordable, low carbon energy for the future.
I have always been clear that oil and gas companies are part of the solution. These energy giants have the expertise and the financial muscle to accelerate the United Kingdom’s journey to net zero by innovating, adopting, and rolling out new green technologies; aiding us in the transition to net zero whilst we still need fossil fuels; and leading the inevitable shift from being huge fossil fuel producers to green energy companies.
These companies also provide skilled employment for British workers; investment in energy UK infrastructure and tax receipts to HM Treasury; and promote UK plc around the world. They are also best placed to lower energy costs for consumers.
We must take everyone with us on our transition to net zero, and oil and gas companies are critical in its success. However, in the current economic climate, the big energy companies must take immediate action to fulfil their obligations to the British consumer.
Alexander Stafford is the Conservative MP for Rother Valley.
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