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Politicians could soon spoil the party for BP

·2-min read
Oil firms have recorded soaring profits as consumers face energy price hikes (Nicholas T Ansell/PA) (PA Wire)
Oil firms have recorded soaring profits as consumers face energy price hikes (Nicholas T Ansell/PA) (PA Wire)

Rarely has the often baffled mutual incomprehension between the City and Westminster been on more stark display than in the reaction to today’s remarkable quarterly figures from BP.

Analysts trilled that the “close to perfect” quarterly results showed what an admirably well run business it is as the shares pumped up 4%.

But down the road in the studios around Parliament politicians lined up to condemn the “eye- watering profits” made at a time of increasing fuel poverty for millions of voters.

The timing was not helped by the latest calculations from analyst Cornwall Insight showing that average energy bills will stay above £3000 until at least 2024.

As ever both sides have a point. Of course it is welcome that a British-based company that still props up many a pension fund despite the carbon divestment movement is delivering such good returns. And those profits are vital if investment in cleaner energy is to be maintained.

It has been a bumper quarter for “Big Oil” with the majors making a record total of $62 billion in profits, smashing the previous high $43 billion in the second quarter of 2008 when oil prices topped out at $147 a barrel.

That “cash machine” quote from BP boss Bernard Looney states the reality very accurately but may come to haunt him just as much as much as former Sainsbury’s boss Mike Coupe’s ill-judged singing of “we’re in the money” a few years ago.

There is little doubt that the public mood is darkening and that does not seem to be priced in to today’s ebullient City reaction.

We are about to enter a very ugly period politically when a Prime Minister instinctively opposed to interventions such as windfall taxes could be replaced by a successor much more concerned about winning their own mandate in 2024.

BP should enjoy the moment, the public demand for action is likely to prove hard to resist.

@JonPrynn

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