BP’s profits double to $27.7 billion

British energy company has BP reported record annual earnings amid growing calls for the U.K. government to boost taxes on companies profiting from the high price of oil and natural gas after Russia’s invasion of Ukraine.

The London-based company said underlying replacement cost profit, which excludes one-time items and fluctuations in the value of inventories, jumped to $27.7 billion in 2022 from $12.8 billion a year earlier. Last year’s figure beat the $26.8 billion BP earned in 2008, when tensions in Iran and Nigeria pushed world oil prices close to more than $147 a barrel.

BP also increased its quarterly dividend by 10% and announced plans to buy back $2.75 billion of stock from shareholders.

But the good news for BP shareholders is likely to be tempered by the public fallout, particularly in its home country. High oil and gas prices have hit Britain hard, with double-digit inflation fueling a wave of public sector strikes, soaring food bank use and demands that politicians expand a windfall tax on energy companies to help pay for public services.

Similar censure was directed at London-based Shell last week, when it said annual earnings doubled to a record $39.9 billion last year.

The UK’s leading progressive thinktank, IPPR, responded to the announcement with Joseph Evans, researcher at IPPR, saying: ”While bill-payers across the UK are struggling with soaring costs, BP’s shareholders are reaping enormous payouts. After the oil giant made record profits in 2022 it passed an extraordinary £9.35 billion directly back to shareholders through share buybacks.

That’s a scandalous use of surplus cash which could have been used to lower bills, or invested in the green transition. America and Canada are already taking action on excessive shareholder payouts: it’s long overdue for the government to follow suit by introducing a tax on share buyback schemes.”