Why the UK will now tax the profits of oil giants

The United Kingdom is the first to trigger this device: tax the super-profits reaped by multinational oil companies whose profits are proportional to the surge in crude oil prices on the world market. It is a reversal on the part of the British government which had been dragging its feet for months. Now we have to go: the British finance minister is forced to swallow his hat because he has to find the money necessary to finance a plan of 15 billion pounds sterling (about 17.5 billion euros) for the most disadvantaged households.

43 billion euros

Across the Channel, inflation is at its highest for 40 years with a rate of 9% in April. One in five Britons say they can no longer make ends meet. Some of the most vulnerable households will receive at least 1,200 pounds (1,400 euros) this year. For others, there will be an increase in the minimum income of 470 euros and a doubling of the reduction on energy bills. Total cost of public aid, with those already announced: 43 billion euros.

This financial drain that will be applied to the oil giants will not be enough to fully finance this program but will contribute greatly. The tax in question will hit the profits of oil and gas companies – British like BP and those trading through the UK – by 25%. A temporary tax that will initially recover just over six billion euros. For some NGOs, this is very little. Greenpeace, for example, is calling for a 70% tax on the profits of energy groups.

Contrary to what one might think, few other countries will follow the United Kingdom. France recently closed the door to this idea. Many States believe that this would be counterproductive by hampering the investment capacities of the groups concerned in the energy transition.

London also specifies that its exceptional taxation of the gas and oil giants could be greatly reduced if they invest in new sources of energy.