Shell’s £8 billion profit stokes calls for more taxes as it makes £58,000 a minute

·2-min read
Shell has never made more money in the first quarter of any year, but its earnings are down from the last three months of 2022 (Yui Mok/PA) (PA Archive)
Shell has never made more money in the first quarter of any year, but its earnings are down from the last three months of 2022 (Yui Mok/PA) (PA Archive)

Shell today revealed profit of almost £8 billion for the first quarter of the year, putting the spotlight back on the sheer scale of earnings at energy companies during a cost-of-living crisis driven by high fuel prices.

It meant the Anglo-Dutch giant made money at a dizzying pace  –  £58,000 per minute or nearly £1,000 a second – even with oil prices off the peaks touched after Russia’s invasion of Ukraine, at an average of around $81 in the period, down from over $100 a year earlier.

There were calls for deeper windfall taxes on the sector as the size of the profit reverberated around Westminster. Campaign group Global Justice Now called the profits “iniquitous”, adding: “Enough is enough, we need a polluters tax to put that money back where it belongs and end this loathsome profiteering off our climate misery.”

Shell’s earnings hit $9.6 billion, a record for the first quarter, but just below the $9.8 billion profit for the fourth quarter of last year. Annual profits for 2022 smashed records at $40 billion, doubling year-on-year.

Today’s first-quarter numbers were higher than City forecasts of around $8 billion, helped by a strong showing in its chemicals business, which offset the drop in oil prices.

Shell announced a bumper payday for investors, via a $4 billion share buyback (£3.2 billion)

Michael Hewson, chief market analyst at CMC Markets said Shell’s capital return was likely to be “further political catnip to its detractors,” but branded calls for higher windfall taxes as “the customary chorus of political flatulence”, pointing out that “the share price has slipped back on a combination of concern over a slowdown in demand, as well as sharp declines in the prices of oil and gas.”

The stock added 74p to 2395p today, leaving it off last year’s peaks over 2600p.

Shell is one of the biggest companies on the FTSE 100, starting the year with a market value second only to AstraZeneca. It is increasing its investment in renewable energy resources, but has faced criticism for not moving quickly enough.

Adjusted earnings at its “Renewables & Energy Solutions” division for the first quarter were $389 million, compared with $4.9 billion at its “Integrated Gas” business.

Shell’s CEO,  Wael Sawan, said the results were “strong” as it was “continuing to provide vital supplies of secure energy.”

He has a target to make Shell “a net-zero emissions energy business” by 2050. It has been buying solar power assets and investing in windfarms, including a major project off in the North Sea off the  Dutch coast. But today’s numbers made clear the size of the transition to green energy that it faces.

Ben Stansfield, sustainability partner at law firm Gowling WLG, said: “There are still significant challenges ahead for Sawan if he is to achieve Shell’s target of becoming a profitable net-zero emissions energy business.”