Soaring profits at two of the UK’s biggest energy companies have been described as an “insult” to millions of people struggling amid the cost of living crisis, with high oil and gas prices funding multibillion-pound rewards for their shareholders.
A day after households were warned average annual energy bills could hit £3,850 from January, triple the level at the beginning of this year, Shell and Centrica sparked outrage by announcing huge windfalls.
Shell posted record earnings of $11.4bn (nearly £10bn) for the three-month period from April to June and promised to give shareholders payouts worth £6.5bn.
Asked about the stark contrast with punishingly high bills faced by households already struggling amid sky-high inflation, Shell’s chief executive, Ben van Beurden, said the company could not “perform miracles” to bring oil and gas prices down, adding: “It is what it is.”
At the same time, Centrica, the owner of British Gas, reinstated its dividend, handing investors £59m, after reporting operating profits of £1.3bn during the first half of 2022.
Frances O’Grady, the general secretary of the Trades Union Congress, said: “These eye-watering profits are an insult to the millions of working people struggling to get by because of soaring energy bills.
“Working people are facing the longest and harshest wage squeeze in modern history. It’s time working people got their fair share of the wealth they create, starting with real action to bring bills down.”
Debt advice charities, businesses and MPs redoubled their calls on ministers to take action now to avoid plunging millions more housholds into financial distress, as concern mounted at the lack of a coherent government plan.
The energy regulator, Ofgem, is due to announce a hike in the energy price cap within days. It will take effect from October, with another increase expected in January. According to forecasts issued earlier this week, unless the flow of Russian gas into Europe increases, average dual-fuel tariffs could soar to £3,850 a year from January.
If the prediction proves correct, average bills will have risen more than £2,500 within a year.
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The war in Ukraine, combined with bottlenecks caused by pandemic lockdowns, has led to a surge in oil and gas prices, causing misery for motorists and households as the prices charged for gas, electricity and petrol have reached all-time highs.