Shell announces biggest profits ever, whilst households face price hike
Shell announced their biggest profits ever in their 115-year existence. But while they report almost $40 billion in profits, households face a 40% price hike in April.
Depressingly, Shell isn’t unusual – ExxonMobil this week reported a $55.7 billion profit for last year, the highest annual earnings for any western oil company. The total profits for 2022 for the big oil companies, known as the “supermajors” are expected to hit $200 billion.
Shell, ExxonMobil and these other oil and gas giants don’t have a magic money tree: those profits don’t come from nowhere. The money they receive is directly linked with the money that ordinary people pay in bills every month.
Bills are double what they were 18 months ago and are set to increase again in April when the energy price cap rises to £3,000 per year for a typical household. 12 million households in the UK are already spending more than 10% of their income on energy bills and research by Citizens Advice shows that more people couldn’t afford to top up their prepayment meters in 2022 than the whole of the last 10 years combined. That means just last year 3.2 million people across the country were effectively cut off altogether because the costs were just too high.
The news about Shell’s megaprofits follow hot on the heels of the scandal uncovered by journalists that debt collectors working on behalf of British Gas broke into vulnerable customers’ homes to “force-fit” prepayment meters when they struggled to pay their bills.
In total, Shell distributed $26 billion to shareholders in 2022. Based on the new £3,000 price cap, this sum would pay the entire bills of more than 7 million customers. Instead, Shell paid just $134 million under the Tories’ ineffective windfall tax. It’s a fraction of what the company will pay in the rest of Europe who have a more robust policy, and a fraction of what they’d pay under a Labour Government. As Shadow Climate Change Secretary, Ed Miliband MP, said, “it is only right that the companies making unexpected windfall profits from the proceeds of war pay their fair share.”
Because this cost-of-living crisis is a result of political choices. Despite the Tory Government claiming that public sector pay has to remain low to avoid fuelling inflation, the Bank of England is clear: it is energy costs not wages driving prices up. Our record inflation is a product of big businesses making outrageous profits.
And it’s not like the cost to produce energy has changed drastically. Companies like Shell are cynically cashing in on Putin’s invasion of Ukraine – embargoes on Russian oil and Putin’s decision to cut off supplies to Europe have caused the price of oil and gas to go up. But the costs for companies like Shell to produce energy have not changed – they are simply sitting back and benefitting from the surge in global oil prices by passing them onto hard-pressed households.
It’s not fair that public services and those who work for them are paying the price for the corporate greed and the politicians who look the other way – or who are too weak to take real action. It’s time to rise up together to demand that the Prime Minister and Chancellor fixes this pay crisis by making big business pay its fair share.