Shell boss Ben van Beurden called at an industry conference on Tuesday to tax energy companies more to protect the poorest in the face of the energy crisis.
“We cannot have a market that behaves in such a way […] that it will inflict damage on a significant part of society,” he said during a question and answer session at the Energy Intelligence Forum conference, which is being held in London and lasts three days.
“One way or another, there needs to be government intervention that translates into […] by protecting the poorest and that probably means governments have to tax the people in this room,” he said.
“I believe we have to accept this social reality,” he insisted, adding, however, that “it could be done intelligently or not,” without further details.
The profits of oil and gas companies have soared since the war in Ukraine in the wake of oil prices.
The heavyweights of the sector had risen to the plate against a special tax decided by the predecessor of the Chancellor of the Exchequer Kwasi Kwarteng and which the new conservative government of the United Kingdom of Liz Truss will not extend.
Susannah Streeter, an analyst at Hargreaves Lansdown, said the Shell chief’s remarks “open the door wide to a special tax” on oil and gas profits, in the context of heated political debate on the sector’s “superprofits” in Europe.
Shell’s profits doubled year on year last quarter to 18 billion pounds (about $28 billion).
Mr van Beurden’s statements were seen as “generally supportive of European plans to tax corporate profits to help pay for government energy support plans”, Ms Streeter continues.
The NGO Greenpeace wonders for its part “what it will take the British government” to adopt one, even though the boss of Shell “supports a special tax”… while such a tax would make it possible to finance government aid to energy bills, valued at 60 billion pounds (about 93 billion dollars) for just six months in the United Kingdom.
In the United Kingdom in particular, Liz Truss and Kwasi Kwarteng had to backtrack on an income tax cut for the richest, criticized even within the Conservative Party in the midst of a cost of living crisis.
push to the limit
The managing director of Shell, who will leave office at the end of 2022, was also skeptical about the idea of a price cap for Russian oil.
Several countries are calling for limiting the sale price of Russian oil to undermine the windfall allowing Moscow to finance, in particular, its military intervention in Ukraine.
In September, the G7 countries had thus decided to “urgently” cap the price, a complex mechanism to put in place, in particular by inviting a “broad coalition” of countries to implement it.
“I find it hard to understand how a cap on Russian oil prices can be effective,” van Beurden said during the Energy Intelligence Forum conference, according to comments relayed on Twitter.
“Intervening in complex energy markets will be very difficult,” he continued, calling on governments to consult experts before acting.
For his part, the boss of the powerful Saudi oil company Aramco, Amin Nasser, declared at the same conference that the world “needs to acquire more capacity in oil, gas and LNG, otherwise any breakdown or jump in demand will push producers to their limits and could cause even more turbulence in the markets”.
Crude prices soared to near all-time highs shortly after the Russian invasion of Ukraine. They have since fallen sharply, to the point where the Organization of the Petroleum Exporting Countries and its OPEC+ allies, including Russia, are now eyeing a substantial drop in production.
OPEC + meets face-to-face in Vienna on Wednesday for the first time since March 2020.
Gas prices have also soared to historic highs since the war in Ukraine before falling back, but remain historically very high.