AS MILLIONS of families face massive increases in their energy bills when the Tories raise the cap on prices by 54% in April, the giant oil companies are reporting record profits.
Yesterday, BP posted a profit of $12.8 billion (£9.5bn) for 2021 – the biggest in eight years.
BP made over $4 billion in the final quarter of that year at the time when oil and gas prices surged meaning that the company is generating profits at the rate of £1.3 million an hour!
BP announced this massive surge in profits with chief executive Bernard Looney proudly boasting: ‘We’ve strengthened the balance sheets and grown returns, we’re delivering distributions to shareholders with 4.15 billion US dollars of buybacks announced and the dividend increased, and we’re investing in the future.’
In December, Looney had gloated that the energy crisis had transformed BP into a ‘cash machine’.
The future BP is investing in is one of handing out billions to its shareholders through stock buybacks and ensuring increased dividend pay-outs.
Last week the other UK-based energy giant, Shell, announced its own bumper profits made out of the energy crisis.
On the very day that the energy price cap was increased Shell announced pre-tax profits of $16.3 billion in the last three months of 2020 and that this record profit would be used to pay out $8.5 billion to its shareholders.
All these billions handed out to shareholders of these ‘cash machine’ oil companies is coming out of the pockets of workers and their families.
They come as the average UK household faces a record increase in gas and electricity bills of £700 a year pushing millions into extreme fuel poverty and the choice between heating and eating.
The biggest pain will be inflicted on poorer families who are forced to rely on prepayment meters for their energy supplies. Prepayment meters require that customers pay in advance either online or through topping up their cards in convenience stores.
These customers face even bigger charges of over £700 a year with a typical bill for the 4.5 million prepayment meter customers of £2,027 pa.
Already, large numbers of pay-as-you-go customers are going without gas and electricity ahead of the massive increase in energy bills.
Bill Bullen, head of Utilita – the main prepayment energy supplier with 827,000 customers, said that twice the usual number of prepayment meter users are ‘self-disconnecting’ when they run out of money.
Bullen told the BBC that at this time of year about 2-3% of prepayment users would simply stop using gas or electricity but that is now between 5-7% who are without energy, a figure that can only shoot up in April.
The massive profits being announced by the oil companies have led to calls from the Labour Party and the TUC for the Tories to bring in a one-off ‘windfall tax’ on North Sea Energy producers which, they claim, would raise £1.2 billion to help households.
The Tories naturally have dismissed this out of hand as it would ‘discourage investment’ by the oil giants.
This call for a windfall tax is a complete diversion from the acute crisis that millions of workers face of being unable to heat their homes and being forced to cut back or severely restrict energy use because they cannot afford these bills.
Apart from the fact that the Tories will never allow even a one-off tax on the oil companies, the reality is that only a fraction of their profits is generated in the North Sea which has been in decline as a gas and oil producer for decades.
A tax on North Sea energy would do nothing to alleviate the pain that capitalism is intent on inflicting on workers.
It is not a question of windfall taxes or begging the Tories to ‘help’ the working class but of the powerful working class rising up and using its strength in a general strike to close down British capitalism, kick out the Tories and bring in a workers’ government.
A workers’ government will nationalise the energy and oil companies placing them under the management of the working class as part of building a socialist planned economy.