Calls for windfall tax as oil giants make £6 million an hour

Shell is expected to report profits of £5.8 billion during the three months to the end of September Photo: AFP/GETTY IMAGES

The two companies will this week report massive third-quarter profits totalling nearly £12.6 billion, according to analysts’ estimates.

Shell, Europe’s biggest oil company, is expected to report profits of £5.8 billion during the three months to the end of September, up nearly 20 per cent on the same period last year.

BP is likely to report profits of about £6.8 billion for the third quarter of 2008, up 62 per cent on the same period in 2007, analysts said.

The huge profits mean the two companies together were making almost £6 million per hour over the three month period as they benefited from the high price of crude oil. In July oil reached a record $147 a barrel.

However, the price has fallen amid the global economic slow down, dropping under $100 a barrel at the end of September and closing last week just above $60.

The oil companies say future profits, and shareholder dividends, will come under increasing pressure over the next 12 months as a result.

The Government wants to avoid imposing a windfall tax on energy companies and has announced measures to help people in fuel poverty instead.

But bumper profits for BP and Shell will lead to more pressure on Gordon Brown from motorists and unions.

Tony Woodley, joint general secretary of the Unite union, described the oil giants’ profits as “eye-popping” and “immoral”.

He said: “As families up and down the land wait in fear of the twin terrors of the cold and the fuel bill, it is time to put an end to this obscene profiteering.

“A windfall tax on the oil giants would help six million people heat their homes this winter.”

AA spokesman Luke Bosdet said extra profits for the oil companies should be passed on to the motorist by reducing petrol prices on forecourts, or should be put into developing alternative fuels.

He also said BP and Shell should use the profits to invest in refining diesel to bring its price down to the same as petrol.

Mr Bosdet said it was not the oil companies who were responsible for recent falls in petrol prices at the pumps.

He said: “If it was not for the price war at the supermarkets the major oil companies would not be bringing down prices at their own petrol stations.”

Oil companies deny charges of profiteering and say what they make in the UK is a fraction of the amount made elsewhere.

BP says it makes less than a penny profit on each litre of petrol sold at its 1,300 filling stations.

ORIGINAL ARTICLE