BP profits surge as high gas prices hit household finances

BP PLC has reported its biggest full-year profit for eight years

Britain Earns BP (Copyright 2017 The Associated Press. All rights reserved.)

BP PLC reported its biggest full-year profit for eight years on Tuesday, its coffers boosted by soaring oil and gas prices that have hiked domestic fuel bills for millions of people.

The British energy giant said its underlying replacement cost profit — the industry standard — was $12.8 billion for 2021, compared with losses of $5.7 billion the previous year. The figure includes a better-than-expected $4.07 billion profit in the final quarter.

The company said it would reward shareholders with a $1.5 billion share-buyback program before its first-quarter 2022 results and a dividend payout of 5.46 cents a share for the fourth quarter.

BP has rebounded from a 2020 slump caused when the coronavirus pandemic shuttered large chunks of the global economy. Oil and gas prices have since surged, with prices driven upward by reopening economies and concern over gas supplies amid tensions over Russia’s military buildup near Ukraine

BP’s hefty profit came as British households and businesses struggle with soaring inflation — the consumer price index hit 5.4% in the year to December — and surging energy bills. Britain’s energy regulator last week announced that household gas and electricity prices would rise by 54% in April.

British opposition parties have called for a windfall tax on energy firms, something the Conservative government has so far ruled out.

“The boss of BP described the energy price crisis as a cash machine for his company — and the people supplying the cash are the British people through rocketing energy bills,” said Ed Miliband climate spokesman for the opposition Labour Party

“In these circumstances, it is only fair and right for oil and gas producers to contribute to helping the millions of families facing soaring inflation and a cost-of-living crisis,” he said.

Alongside its results, BP also announced plans to boost its spending on low-carbon and renewable energy.

Chief executive Bernard Looney, who mentioned in November that high oil and gas prices made the company “literally a cash machine,” said that “2021 shows BP doing what we said we would — performing while transforming.”