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UK slaps windfall tax on oil and gas giants


Sunak described previously the concept of a windfall oil and gas tax for majors as “superficially tempting”, but ultimately would discourage investment.

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LONDON — U.K. Finance Minister Rishi Sunak has imposed a windfall tax on oil and gas majors as the government scrambles to alleviate the country’s worsening cost-of-living crisis.

One day later, the measures are in place deeply embarrassing investigationlocked down parties in Downing Street, and under constant pressure from the ruling Conservative government for more. Soaring inflation is pushing up everything, food included.

Sunak claimed that an escalating inflation rate is creating “acute distress,” and that the economic environment has become more severe over the past year.

Inflation in the United Kingdom jumped to 9.9% last month, as energy and food prices spiralled. reaching its highest annual rate in 40 years. Bank of England expectsThis year, inflation will rise to above 10%

Boris Johnson’s government has made yet another turn by imposing a windfall tax for energy companies. Sunak had previously rejectedAccording to the statement, although it appeared “superficially charming”, it would deter investment.

Opposition lawmakers repeatedly asked the government to impose an energy tax majors once and for all. They claimed that the move would fund a national support package for householders.

Britain’s giant oil and gas companies BPAnd ShellThe surge in commodity prices caused by Russia’s aggression on Ukraine resulted in huge quarterly profit reports earlier this month. The government is now urging them to tax the excess cash.

Rachel Reeves was the shadow finance minister in the Labour Party and welcomed Sunak’s resolve to reverse the policy after several months of opposition.

“It seems the Chancellor is finally being dragged kicking & screaming to a U turn, and four months late adopting Labour’s call for a windfall tax on oil & gas producer profits,” Reeves said via Twitter on Thursday morning.

It took so long, “Why? “Why have his families been left to worry and struggle while he drags his feet?”

‘Nightmare scenario’

This week, Ofgem was headed by the chief of Britain’s energy regulator warned that a price cap on the most widely used consumer energy tariffs was set to climb by £800 ($1,005) in October, bringing the typical household bill to £2,800 a year.

Earlier this month, Shell and BP, Britain’s largest oil and gas companies reported record quarterly profits.

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The proposed cap would be a substantial jump from the current level of £1,971 which, when it was introduced last month, represented a record-breaking rise of £700.

Jonathan Brearley, Ofgem CEO, said Tuesday that price movements in gas markets were “a once in a generation event” and was speaking to legislators at the Business, Energy and Industrial Strategy Committee.

In October, the proposed price cap hike could increase fuel poverty by nearly doubling to 12,000,000 households from 6.5million. A household that cannot afford heat is considered fuel poverty.

Campaigners describe the possibility of additional energy bill increases this winter, as a “strange” prospect.nightmare scenario“” warning that the only way to end the global crisis affecting the country’s fifth largest economy is by establishing an emergency budget.

The End Fuel Poverty Coalition has estimated that if fuel poverty levels hit the limits predicted, thousands of additional winter deaths will take place due to cold homes in 2022 and 2023 — mainly among the elderly and vulnerable.

Brenda Boardman (emeritus fellow) said that the injustice of the situation is simply unbelievable. She was also a researcher at the Environmental Change Institute of the University of Oxford.

It is urgent that the energy market be designed to meet the needs and wants of consumers. It is a fundamental necessity that ultimately affects life and death as well as comfort and good health, and the development of children.