Page 12 - EurOil Week 11 2022

EurOil POLICY EurOil

Johnson rules out windfall

tax on oil firms

UK UK Prime Minister Boris Johnson has ruled energy prices on the most vulnerable consumers.
out imposing a windfall tax on energy firms as a Johnson has said his government is working
Johnson says that the means of shielding consumers from high prices. on a new energy independence plan that will be
move would lead to The opposition Labour Party has called for issued “in the course of the next few days.” The
even higher energy the tax to be applied to oil company profits, in UK is already taking steps to curb its reliance
prices. order to raise revenues that could help consum- on Russian energy, having announced plans to
ers struggling with soaring energy bills. phase out oil and oil product imports from Rus-
“The net result of that would simply be to see sia by the end of the year.
the oil companies put their prices up yet higher,” The prime minister faces growing calls from
Johnson said, adding that such a move would his own Conservative party to revive shale gas
also undermine UK efforts to reduce reliance exploration as a means of weaning the UK off
on Russian oil and gas. “That is the way forward energy imports. It was his government that
for this country; it is to take a sober, responsible imposed a moratorium on shale gas develop-
approach and end our dependence on hydro- ment in late 2019, even though the resource
carbons altogether, and particularly Russian could potentially provide the UK with enough
hydrocarbons.” gas to cover its needs for over a 100 years. How-
A windfall tax was proposed this month by ever, public opinion remains strongly against
the International Energy Agency (IEA) this shale gas, with some polls showing that people
month as part of a 10-point plan to reduce consider it worse than coal.
Europe’s reliance on Russian energy. UK-based oil majors BP and Shell have
“Temporary tax measures to raise rates on elec- meanwhile announced plans to sever
tricity companies’ windfall profits could be con- trade with Russia because of its invasion of
sidered,” the Paris-based agency said. “These tax Ukraine. Shell has immediately ended spot
receipts should then be redistributed to electricity oil purchases and will cease its involvement
consumers to partially offset higher energy bills.” in “all Russian hydrocarbons” in phases. BP
The IEA estimates that those levies, which has ended all new oil contracts and deals with
have already been applied in Italy and Romania Russian entities, including Russian-flagged
this year, could generate an extra €200bn in rev- vessels, Russian ports and Russian counter-
enue that could help cushion the blow of higher parties. ™

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