Yahoo Finance Shell boss calls for windfall tax on energy firms to help people with rising bills
The chief executive of Shell (SHEL.L) has suggested that governments should tax energy firms to help the poorest people deal with soaring bills but shouldn’t step in to cap gas prices.
"One way or another there needs to be government intervention," Ben van Beurden said. "Protecting the poorest, that probably may then mean that governments need to tax people in this room to pay for it."
"I think we just have to accept as a society — it can be done smartly and not so smartly. There is a discussion to be had about it but I think it’s inevitable."
Read more: Help to heat scheme: £1.5bn funding may cut energy bills by up to £700
It comes as the European Union last week agreed on an initial energy package, including a windfall tax on companies. The bloc has also been discussing a cap on the price of natural gas and power.
Europe is expected to raise €140bn ($139bn, £122bn) through the levies.
Van Beurden, who was speaking at an energy conference in London, criticised the cap, saying that firms like Shell would struggle to bring extra natural gas supplies to Europe without a price incentive.
"We will do our best to bring gas to Europe where it's needed, but if the market signal is not there it's going to be really challenging," he added.
The energy boss, who will step down at the start of next year, also said he "struggled" to see how a price cap on Russian oil would work.
Shares in the company were up as much as 1.7% in afternoon trade in London.
Analysts say the chief has "flung open" a door on windfall tax after net profits jumped to £18bn in the previous quarter under the outgoing CEO.
Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown, said: "Shell’s boss has flung open a door on a windfall tax which the UK government had been trying to close.
"This will reignite the debate over how profits of energy giants should be taxed, just as a row rages about whether welfare spending will be hit to pay for the Truss administration’s slash and spend policies."
Read more: How four days of market chaos has impacted UK household finances
Energy prices shot up soon after Russia invaded Ukraine earlier this year, although prices had already been on the rise as economies began to recover after pandemic lockdowns were lifted.
Georgia Whitaker, Greenpeace UK energy campaigner, said: "When the head of BP (BP.L) has likened his company to a cash machine, and the boss of Shell is actually backing a windfall tax, it makes you wonder what it’s going to take for the government to make a withdrawal?
"A windfall tax on fossil fuel companies’ billions of excess profits could pay for the energy bill freeze, as well as funding vital home energy upgrades - addressing the cost of living crisis and the climate crisis in one go.
"This money has been up for grabs all year and other countries have already introduced windfall taxes. But all our government has done is bring in sticking plaster solutions that fail to tackle the root causes of fuel poverty, energy insecurity and the climate crisis."
Watch: Why are gas prices rising?
