The oil and gas giant Shell, has recorded enormous profits for 2022 on the back of a surge in energy prices after the Ukraine war, with annual adjusted profit jumping to almost $40 Billion for the year – a 115 year high.
Profits jumped from close to €20 billion in 2021 to record-breaking levels in 2022 after sanctions on Russia led to fears of a shortage in the supply of gas, in particular.
The huge profits being recorded by energy companies during the war, have led to calls for the introduction of a windfall tax, or for an existing tax to be increased, given that many ordinary households are desperately struggling to pay electricity bills.
Campaigners say the windfall tax should be used to directly help those who cannot meet soaring light and heat costs.
Shell said that it had taken a charge of almost $2bn for windfall taxes in the EU and UK – less than 5% of the profits recorded.
Under measures brought forward in Ireland for a windfall profit tax, electricity generated from natural gas would not be subject to a cap. Shell’s record profits were mostly driven by the company’s gas division which benefitted from volatile global gas prices.
While oil prices are now below the level seen before the invasion of Ukraine, electricity providers usually buy energy using future contracts.
The leader of the Liberal Democrats in the UK, Ed Davey, said that no company should be making “outrageous profits” from the invasion of Ukraine.
Shell said their results demonstrated “the strength of Shell’s differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.”