ENERGY
How can oil companies make record profits in a cost-of-living crisis?
Oil giants BP and Shell recently announced record profits while millions of people in the UK struggle to afford their energy bills.
“While bill-payers across the UK are struggling with soaring costs, BP’s shareholders are reaping enormous payouts,” said IPPR researcher Joseph Evans. “After the oil giant made record profits in 2022 it passed an extraordinary £9.35 billion directly back to shareholders through share buybacks.
“That’s a scandalous use of surplus cash which could have been used to lower bills, or invested in the green transition.”
So why are profits so high? And is there anything, realistically, that can be done to redress the balance?
Dr Mari Martiskainen, a professor of energy and society at the University of Sussex, said: “BP profits are going up as the company is profiting from soaring oil and gas prices due to the Russian war on Ukraine. As less Russian oil and gas reach the markets, prices go up, which increases profits for suppliers.”
BP has said its profits are going to be invested in green energy projects “focusing on solar growth and aiming to become a leader in offshore wind”.
But Martiskainen says their profit announcement “also included details of BP actually reducing their commitment to emissions reductions”. Instead, they are investing more in oil and gas.
“BP’s exorbitant profits are the result of fundamentally broken markets,” Dr Marie Claire Brisbois, a senior lecturer in energy policy at the University of Sussex, said. “Despite
