Rishi Sunak Plans to Extend Windfall Taxes on Energy Firms after Strong Earnings in 3Q

Rishi Sunak, the British prime minister, and Jeramy Hunt, the finance minister, were planning to extend windfall taxes on oil and gas companies, increasing the rate from 25% to 30% until 2028, which could raise nearly 40 billion pounds in a five-year span. 

Higher profit from oil and gas companies were lifted by tight global supplies and disruption following Moscow’s invasion of Ukraine means as four largest global oil companies out of five have reported a combined of $50 billion in net income, including companies such as Shell, which reported a quarterly profit of $9.45 billion and a 15% dividend increase last week.

The 25% windfall tax on oil and gas producers’ profits, which helped to fund a package of support for households, was introduced by Sunsk in May under the former government of Boris Johnson as prime minister, but met with criticism from oil and gas companies, saying that the move would shrink investment and domestic production.

Alok Sharma, the president of the COP26 climate summit, said earlier this week that the United Kingdom should explore extending a windfall tax on oil and gas.