BP reports huge profits as energy bills soar

BP has reported massive profits for the three months to June, after oil and gas prices soared.

The energy giant saw underlying profits hit $8.45bn (£6.9bn) – more than triple the amount it made at the same time last year.

The figure is the second highest in the firm’s history and takes its half-year profits to $14.6bn.

It comes on the day typical household energy bills have been forecast to hit more than £3,600 a year this winter.

The figure is hundreds of pounds more than previously predicted, prompting calls for more support for families struggling with the cost of living.

Dr Craig Lowrey, principal consultant at Cornwall Insight, told the BBC’s Today programme that energy bills “at this point in time” looked set to stay high across 2023 and into 2024.

“This is very much long-term problem for households and one which is going to need concerted and enduring action form the government to help manage that,” he said.

BP’s profits were higher than expected and follow record profits from rival Shell and huge earnings from British Gas owner Centrica last week.

The huge increase in profits for firms has been fuelled by higher prices for oil and gas, which have risen sharply due to the war in Ukraine.

In recent months, Russia has reduced supplies to Europe following the invasion and fears are growing it may switch off the taps altogether.

The potential of gas supply problems have led to the wholesale price soaring, which has led to energy firms passing those costs onto customers – pushing up household energy bills by unprecedented amounts.

BP said following its bumper profit results that it would boost shareholder payouts by 10% as well as buy back shares as a result of its higher earnings.

Last year, chief executive Bernard Looney described the energy market as “a cash machine”.

But on Tuesday said the company’s staff had helped to solve an “energy trilemma” which he said was “secure, affordable and lower carbon energy”.

“We do this by providing the oil and gas the world needs today – while at the same time, investing to accelerate the energy transition,” he added.

BP said strong refining margins and oil trading helped it boost its profits, adding it expected expected crude oil and gas prices as well as refining margins to remain “elevated”.

However, the company’s half-year figures were affected by a massive £19.9bn hit from its move to ditch the its near-20% stake in Russian oil producer Rosneft in response to the Ukraine war.