Energy companies in the UK have amassed over £125 billion in profits over the last five years, as per recent analysis. This total includes approximately £40 billion generated within the past two years alone, based on research conducted by the End Fuel Poverty Coalition. The study scrutinized the financial records of 27 firms, encompassing energy producers, network operators, and suppliers, with many heavily involved in the gas sector and others profiting from energy distribution across the nation.
The surge in wholesale energy prices following the easing of pandemic restrictions in 2021, exacerbated by Russia’s incursion into Ukraine, has led to escalated household bills. Consequently, many individuals have resorted to limiting their gas and electricity usage, resulting in unprecedented levels of energy debt.
Ofgem, the energy regulator, is poised to disclose the forthcoming price cap for millions of households effective January 1. Advocates are urging Chancellor Rachel Reeves to introduce a new windfall tax on energy corporations in the upcoming Budget announcement.
Among the findings, the analysis identified that oil giant BP accrued £9.5 billion in profits from the UK since 2020, while EDF, a French-owned company, amassed £8 billion, and SSE accumulated £22.5 billion.
Simon Francis, coordinator of the End Fuel Poverty Coalition, highlighted the disparity between energy firms’ multi-billion pound profits and the struggles faced by numerous households to afford heating. The figures translate to £878 per household annually in profit. Meanwhile, average annual energy bills have surged from £1,042 in 2020 to £1,755 presently, after peaking even higher in early 2023.
Faiza Shaheen, executive director at Tax Justice UK, criticized the excessive profits of energy companies derived from the hardships of individuals grappling with soaring energy and essential costs. She emphasized the need for the government to appropriately tax energy companies and prioritize lowering energy bills for the general populace.
Robert Palmer, deputy director at the environmental group Uplift, condemned the substantial profits reaped by oil and gas companies at the expense of individuals struggling with exorbitant energy expenses. He called for a shift away from supporting the profit-driven oil and gas industry with substantial public subsidies.
EDF stated that since 2018, it has reinvested double the amount it has made back into Britain, emphasizing its commitment to strengthening energy security and job creation. Similarly, SSE highlighted its substantial investments in the UK economy, job creation, fair tax payments, and support for clean and affordable energy sources.
BP, in its annual report, underscored its positive impact on the UK economy, citing figures from Oxford Economics, including supporting jobs, significant spending with local suppliers, and substantial contributions to the national economy.