A BP gas station in Madrid, Spain.
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LONDON — U.K. oil giant BP on Tuesday raised its dividend and boosted share buybacks after tripling second-quarter profits on robust refining margins and trading.
The British energy major posted second-quarter underlying alternative cost profit, used as a proxy for net profit, of $8.5 billion.
That compared with a profit of $6.2 billion in the primary three months of the yr and $2.8 billion for the second quarter of 2021. Analysts had expected BP to report first-quarter profit of $6.3 billion, in accordance with Refinitiv.
BP also announced a ten% increase in its quarterly dividend payout to shareholders, raising it to six.006 cents per odd share.
Shares of BP rose 4% during morning deals in London, trading near the highest of the pan-European Stoxx 600. The stock price is up over 23% year-to-date.
BP’s results once more underscore the stark contrast between Big Oil’s profit bonanza and people grappling with a deepening cost of living crisis.
The world’s largest oil and gas corporations have shattered profit records in recent months, following a surge in commodity prices prompted by Russia’s invasion of Ukraine. For a lot of fossil fuel firms, the immediate priority appears to be returning money to shareholders via buyback programs.
Last week, BP’s U.K. rival Shell reported record second-quarter results of $11.5 billion and announced a $6 billion share buyback program, while British Gas owner Centrica reinstated its dividend after a large increase in first-half profits.
Environmental campaigners and union groups have condemned Big Oil’s surging profits and called on the U.K. government to impose meaningful measures to bring down the fee of rising energy bills.
“Every family should get a good price for the energy they need. But with energy bills rising much faster than wages, high profits are an insult to families struggling to get by,” Trades Union Congress General Secretary Frances O’Grady said in a press release.
“For a good approach to the fee of living crisis, price hikes and profits must be held back. Ministers must do more to get wages rising across the economy. And we must always bring energy retail firms into public ownership so we are able to reduce bills for basic energy needs,” O’Grady said.
Last month, a cross-party group of U.K. lawmakers called on the federal government to extend the extent of support to assist households pay rising energy bills and description a nationwide plan to insulate homes.
A price cap on essentially the most widely used consumer energy tariffs is anticipated to rise by greater than 60% in October as a consequence of surging gas prices, taking average household yearly dual fuel bills to greater than £3,200 ($3,845).
Fuel poverty charity National Energy Motion has warned that if this happens, it might push 8.2 million homes — or one-in-three British homes — into energy poverty. Fuel or energy poverty refers to when a household is unable to afford to heat their home to an adequate temperature.
“Ministers must impose a much tougher windfall tax on massive oil and gas firm profits. It beggars belief that these corporations are raking in such huge sums within the midst of a cost-of-living crisis,” Sana Yusuf, energy campaigner at Friends of the Earth, said in response to BP’s earnings.
“It’s astonishing that energy efficiency has been given such a low priority. A nationwide insulation programme would cut bills, reduce energy-use and slash climate-changing emissions,” Yusuf said.
The burning of fossil fuels, equivalent to oil and gas, is the chief driver of the climate crisis and researchers have found fossil fuel production stays “dangerously out of sync” with global climate targets.
Speaking in June, U.N. Secretary-General Antonio Guterres called for an abandonment of fossil fuel finance, describing latest funding for fossil fuel exploration as “delusional.”