Leaked Treasury analysis shows that Britain’s gas producers and electricity generators are in line to make profits of more than £170bn over the next two years.
The analysis, first reported by Bloomberg, showed that around 40% of these excess profits will go to big power producers.
However, a government spokesperson dismissed these figures, adding “the government has been clear that it wants to see the oil and gas sector reinvest its profits to support the economy, jobs, and the UK’s energy security,” as quoted in the Independent.
“We also expect our newly introduced Energy Profits Levy to raise an extra £5bn in its first year to help pay for our £37bn pound support package for households.”
Oil and gas companies, such as Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.), and energy providers British Gas, owned by Centrica PLC (LSE:CNA), all announced bumper profits in recent weeks thanks to the surge in oil gas prices bought on Russia’s invasion of Ukraine cutting supply.
These profits, alongside potential Tory leaders Liz Truss and Rishi Sunak, are under pressure as the cost-of-living crisis spirals, with the energy price cap set to rise to above £3,500 this October.