Major oil and gas companies announced 11-figure profits in the second quarter this week. At the same time, global inflation has hit 40-year highs and recessions are on the horizon. When compared to the many households today struggling to pay for basic heating, cooling, and food necessities, the fossil fuel industry’s exorbitant profits are startling.
Today, high energy prices are one of the leading reasons for inflation, and those prices are permeating every aspect of everyday life, most visibly at the petrol pump, but also in delivery costs.
United Nations Secretary-General Antonio Guterres has urged governments to tax the earnings of firms after releasing a UN report that examined the consequences of Russia’s invasion of Ukraine.
He said: “It is immoral for the oil and gas companies to be making record profits from this energy crisis on the backs of the poorest people and communities and at a massive cost to the climate.”
ExxonMobil has doubled last year’s revenue to $17.85bn. Shell surpassed their previous quarterly high of $11.5bn. Chevron recorded a profit of $11.62bn. A new analysis released last week calculated that the oil and gas sector had seen $2.8bn in pure profit over the last 50 years.
These unprecedented profits were achieved after fossil fuel firms successfully pushed G20 governments for $151bn in Covid-19 recovery packages on top of their profits. They also spend approximately $200m each year trying to delay, regulate, or oppose climate-change initiatives.
Politicians and consumer advocates have chastised oil firms for exploiting a global supply deficit to boost profits and fleece customers. In June, US President Joe Biden stated that Exxon and others were making “more money than God” at a time when consumer fuel costs were at an all-time high.
It should be noted however that Shell is giving all of its 82,000 employees a bonus equal to 8% of their salaries after the oil major announced record earnings.
The firm said in a statement: “The award enables those employees to share in our current operational and financial success – it is not a response to inflation or cost of living challenges.”
This is a major turnaround for a corporation that laid off thousands of employees during the Covid-19 outbreak. However, in a time when nations are considering or rolling out a variety of windfall taxes, oil majors still have a lot of ground to cover to convince consumers and politicians that the money they are seeing should not be put back into helping those struggling in the current economic climate.
Guterres added: “Many developing countries – drowning in debt, without access to finance, and struggling to recover from the Covid-19 pandemic – could go over the brink. We are already seeing the warning signs of a wave of economic, social, and political upheaval that would leave no country untouched.”