The London-based oil and gas juggernaut reported a $39,9bn profit for its 2022 financial year, the highest it has ever recorded in its existence over a century.
This far outstrips its 2008 record of $31,4bn. The surge in Shell’s profit is mirrored by other oil and gas majors, including the US based Exxon Mobil, which posted its own record profit of $56,7bn in 2022.
The companies have drawn renewed criticism, with the United States White House calling Exxon Mobil’s profits ‘’outrageous’ as energy firms benefit from the EU embargo on Russian oil, amidst the rising costs of living. Others have called for further imposition of the windfall tax.
The windfall tax was introduced in 2022 by the UK government, which was later joined by the EU, where the tax is imposed on oil companies for extracting oil and gas. The tax was initially set at 25% but was raised to 35% (for the years 2024 to 2028). The UK government claims it will be used to subsidise rising electricity bills of UK citizens. It is payable in addition to the 30% corporation tax and the 10% levy tax.
The UK and EU are reported to have collected $2,3bn in windfall taxes for their 2022 fiscus, with the UK expected to collect $500m in 2023, $413m more than was collected in 2022. The BBC reports that Shell makes only 5% of its profits from the UK. Both Shell and Exxon are currently embroiled in court cases over emissions and taxes. Shell is appealing the 2021 decision by a Netherlands court to have its emissions cut by 45% by the year 2030; whilst Exxon Mobil is suing the EU for imposing the windfall levy – accusing the EU of exceeding its legal parameters.