UK to extend windfall taxes on energy firms – The Times

(Reuters) – British Prime Minister Rishi Sunak and finance minister Jeremy Hunt are planning to extend windfall taxes on oil and gas companies to raise nearly 40 billion pounds ($45.55 billion) over the five years, The Times reported on Wednesday.

Sunak and Hunt want to maximise revenues from the windfall tax, by increasing the rate from 25% to 30% and extending it until 2028, the newspaper said, adding the scheme will be expanded to cover electricity generators.

Downing Street and the finance ministry did not immediately respond to Reuters request for comment.

The report comes as four of the five largest global oil companies have now reported results, combining for nearly $50 billion in net income, lifted by tight global supplies and disruption following Moscow’s invasion of Ukraine.

Shell reported a quarterly profit of $9.45 billion and raised its dividend by 15% last week.

The size of the profits has revived calls from politicians and consumer groups to impose more taxes on the companies to raise funds to offset the hit to households, businesses and the wider economy from higher energy costs.

In May, Sunak under former Prime Minister Boris Johnson’s government, introduced the 25% windfall tax on oil and gas producers’ profits, which helped to fund a package of support for households.

The decision back then was met with critiques from oil and gas companies that it would shrink investment and domestic production.

The president of the COP26 climate summit Alok Sharma said earlier this week that Sunak’s government should explore extending a windfall tax on oil and gas firms.

($1 = 0.8781 pounds)

(Reporting by Juby Babu and Akriti Sharma in Bengaluru; Editing by Leslie Adler and Lincoln Feast)