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Energy giant Shell posts ‘momentous’ £12BILLION profits as millions face soaring bills and cost-of-living crisis

Daily Mail: MailOnline

Energy giant Shell posts ‘momentous’ £12BILLION profits as millions face soaring bills and cost-of-living crisis

Shell has increased its profits nearly fourteen-fold to £12billion amid soaring oil and gas prices – with the energy giant revealing a bumper three months on the same day that the UK price cap is set to rise by around £650.

The London-based company collected $8.88 for every thousand cubic feet of gas it sold to customers in the last quarter of 2021 – with gas previously selling for less than half this amount only six months earlier, at $4.31.

Gas prices have been pushed up in the last year with Russia restricting supply to Europe and China by buying up more international gas shipments. Meanwhile, winds in Europe were unusually still last summer, meaning more gas was needed to replace the electricity that would otherwise have been produced by wind turbines.

The price rises have led to energy suppliers going out of business and contributed to soaring inflation, while from April 1 households will be hit with a hike in energy bills that will see the average hit nearly £2,000.

Shell’s chief executive Ben van Beurden said 2021 had been a ‘momentous year’ for the firm, but it came as the Chancellor is set to announce how the Government will help families pay soaring bills amid the cost of living crisis.

But Labour’s shadow Treasury chief secretary Pat McFadden said Shell’s bumper profits showed why a windfall tax was the best way to fund a support package for struggling families. He told Sky News: ‘They are planning share buybacks and increased dividends but they are not being asked to pay a penny towards the package.’

And shadow chancellor Rachel Reeves tweeted this morning: ‘Shell’s results are in – a year its own CEO calls ‘momentous’. Labour would keep bills low – with our plan that starts with a one-off windfall tax on oil and gas producers. But as Tory plans emerge – it seems they’d rather put the costs on working people’s credit cards.’

Mr Sunak will lead a press conference at 5pm today to set out his plans to help people cope with rising costs.

For Shell the rises in gas prices, and an 18 per cent spike in the price at which its upstream business sold oil, helped propel it to a £12billion ($16.3billion) pre-tax profit in the fourth quarter of last year, compared with just £885.5 million ($1.2billion) in the third quarter.

Mr van Beurden said: ‘We delivered a very strong financial performance in 2021, and our financial strength and discipline underpin the transformation of our company.’

That transformation has included a move of Shell’s headquarters to the UK, a simplification of the company’s previously confusing share structure, and the dropping of the ‘Royal Dutch’ part of its name. Officially the company formerly known as Royal Dutch Shell is now just Shell plc.

These bumper profits have given Mr van Beurden the chance to treat his shareholders.

Combined with £4.1billion ($5.5billion) from the sale of a massive US oil field, he plans to return £6.3 billion (£8.5billion) to investors by buying back their shares.

‘Today we are stepping up our distributions with the announcement of an 8.5 billion dollar share buyback programme and we expect to increase our dividend per share by around 4 per cent for Q1 (first quarter) 2022,’ he said in an update to the stock market today.

Shell’s adjusted earnings reached £14.2billion ($19. billion) in 2021, more than four times its level a year earlier.

Mr van Beurden added: ‘We have a compelling strategy, with customers at its core. We have ambitious plans to generate shareholder value, to decarbonise our products and to provide energy to our customers while respecting nature.’

Regulators will reveal this morning that the energy price cap is to rise by around £650, taking the average household bill to nearly £2,000.

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