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| Shell boss says taxing energy firms to help the poor is 'inevitable' | Shell boss says taxing energy firms to help the poor is 'inevitable' |
| (about 3 hours later) | |
| Taxes on firms within the oil and gas industry are "inevitable" to help the poorest people, the outgoing boss of Shell has said. | Taxes on firms within the oil and gas industry are "inevitable" to help the poorest people, the outgoing boss of Shell has said. |
| Ben van Beurden said that energy markets cannot behave in a way that "damage a significant part of society". | Ben van Beurden said that energy markets cannot behave in a way that "damage a significant part of society". |
| Households in the UK have been under pressure from rising energy bills as gas prices have soared. | Households in the UK have been under pressure from rising energy bills as gas prices have soared. |
| The UK government under Liz Truss has pushed back against extending a windfall tax on oil and gas firms. | The UK government under Liz Truss has pushed back against extending a windfall tax on oil and gas firms. |
| Last week, the EU agreed emergency measures to charge energy firms on record profits. | Last week, the EU agreed emergency measures to charge energy firms on record profits. |
| Energy prices jumped when Russia invaded Ukraine earlier this year, although prices had already been rising as economies began to recover after Covid lockdowns were lifted. | Energy prices jumped when Russia invaded Ukraine earlier this year, although prices had already been rising as economies began to recover after Covid lockdowns were lifted. |
| What is the windfall tax on oil and gas companies and how does it work? | What is the windfall tax on oil and gas companies and how does it work? |
| EU agrees windfall tax on energy firms | EU agrees windfall tax on energy firms |
| Speaking to the Energy Intelligence Forum, an oil industry event, Mr van Beurden said: "You cannot have a market that behaves in such a way - logically and effectively and everything else - that it's going to damage a significant part of society." | Speaking to the Energy Intelligence Forum, an oil industry event, Mr van Beurden said: "You cannot have a market that behaves in such a way - logically and effectively and everything else - that it's going to damage a significant part of society." |
| He said that "one way or another" there would be government intervention that "results in protecting the poorest". | He said that "one way or another" there would be government intervention that "results in protecting the poorest". |
| "That probably means governments need to tax people in this room to pay for it - I think we just have to accept [that] as a societal reality," he said. | "That probably means governments need to tax people in this room to pay for it - I think we just have to accept [that] as a societal reality," he said. |
| Mr van Beurden added that taxes can be brought in "smartly and not so smartly". | Mr van Beurden added that taxes can be brought in "smartly and not so smartly". |
| "There is a discussion to be had about it but I think it's inevitable," he said. | "There is a discussion to be had about it but I think it's inevitable," he said. |
| However, governments should not intervene to cap gas prices, he added. | However, governments should not intervene to cap gas prices, he added. |
| The UK brought in a windfall tax on bumper oil and gas profits in May, but Prime Minister Liz Truss has ruled out extending it. | The UK brought in a windfall tax on bumper oil and gas profits in May, but Prime Minister Liz Truss has ruled out extending it. |
| The tax - called the Energy Profits Levy - applies to profits made by companies from extracting UK oil and gas, and the Treasury expects it to raise about £5bn in its first year. | |
| A UK Government spokesperson said: "The government has been clear that it wants to see the oil and gas sector reinvest its profits to support the economy, jobs, and the UK's energy security." | |
| "We expect our Energy Profits Levy, announced in May, to raise an extra £7 billion in its first year which will help pay for the £400 energy bills discount for all households to help with energy bills from October. | |
| "This is on top of our new Energy Price Guarantee, announced last month which will save the average household around £1,000 a year based on current energy prices from October." | |
| Susannah Streeter, senior investment and market analyst, Hargreaves Lansdown, said Mr van Beurden's comments had "flung open a door on a windfall tax which the UK government had been trying to close". | Susannah Streeter, senior investment and market analyst, Hargreaves Lansdown, said Mr van Beurden's comments had "flung open a door on a windfall tax which the UK government had been trying to close". |
| "This will reignite the debate over how profits of energy giants should be taxed, just as a row rages about whether welfare spending will be hit to pay for the Truss administration's slash and spend policies," she said. | "This will reignite the debate over how profits of energy giants should be taxed, just as a row rages about whether welfare spending will be hit to pay for the Truss administration's slash and spend policies," she said. |
| Production cut? | Production cut? |
| The price of Brent Crude oil has fallen from $120 per barrel in May to about $90 per barrel, although these are still the highest prices since 2014. | The price of Brent Crude oil has fallen from $120 per barrel in May to about $90 per barrel, although these are still the highest prices since 2014. |
| Nevertheless, the Opec oil cartel is expected to announce a cut in output at a meeting on Wednesday, a decision which is designed to support prices. | Nevertheless, the Opec oil cartel is expected to announce a cut in output at a meeting on Wednesday, a decision which is designed to support prices. |
| "Such a decision would be difficult to justify fundamentally, as the oil market suffers anything but a surplus," said Norbert Rucker, head of economics at private banking firm Julius Baer. | "Such a decision would be difficult to justify fundamentally, as the oil market suffers anything but a surplus," said Norbert Rucker, head of economics at private banking firm Julius Baer. |
| "The petro-nations seem willing to exploit their power to artificially prop up oil prices, increasing the tensions with the oil consumers." | "The petro-nations seem willing to exploit their power to artificially prop up oil prices, increasing the tensions with the oil consumers." |