British Finance Minister to meet with oil giants to discuss 35% increased windfall tax

Dec 09, 2022 News

Kaieteur News – British Finance Minister, Jeremy Hunt is schedule to meet with the North Sea oil and gas producers today to discuss the expansion of the windfall tax on the sector.

According to Bloomberg, the meeting will include representatives from oil majors Shell Plc, BP Plc and TotalEnergies SE as well as independents like Harbour Energy Plc and Neptune Energy Group Ltd., according to people familiar with the matter who asked not to be identified.

British Finance Minister, Jeremy Hunt

Last month Kaieteur News had reported when Hunt had announced the British Government plan to increase the windfall tax on oil and gas operators from the current 25 percent which was announced in May of 2022 to 35 percent.

A windfall tax is a one-off tax imposed by a Government on a company, specifically targeting those that benefit from something they were not responsible for. In this instance, the ongoing Russia-Ukraine war have sent oil prices soaring and triggering a cost of living crisis in many countries, including Britain. Amid the war, oil and gas companies have been seeing record-shattering profits and as such, many Governments have introduced a windfall tax on the big profits to alleviate the cost-of-living crisis and balance their economy.

On Thursday November 17, the British Finance Minister said, “I have no objection to windfall taxes if they are genuinely about windfall profits caused by unexpected increases in energy crisis.” Hunt then disclosed that the energy profits levy will increase from 25 percent to 35 percent. He added that the increase will take effect from January 1, 2023 and last until March 2028.

The British Government move for increase windfall tax comes amid British oil and gas giants, like Shell and BP, continue to book record profits this year. For the third-quarter of 2022, BP recorded US$8.2 billion for the three months through to the end of September – whereas Shell recorded US$9.45 billion for the same period.

The British Government move to further tax oil operators’ big profits comes at a time when American oil giant, ExxonMobil subsidiary and its associates are enjoying tax-free profits in Guyana.