A BP gas station in Madrid, Spain.
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LONDON — British oil major BP on Tuesday posted a lucrative second-quarter profit, benefiting from a surge in commodity prices.
The British energy giant reported underlying replacement cost profit (used as a proxy for net profit) of $8.5 billion in the second quarter.
That compares with a profit of $6.2 billion in the first three months of the year and a profit of $2.8 billion in the second quarter of 2021. Analysts had expected BP to post a profit of $6.3 billion in the first quarter, according to Refinitiv data.
BP also announced Tuesday that it would increase its quarterly dividend to shareholders by 10%, raising it to 6.006 cents per common share.
Shares of BP are up nearly 20% so far this year.
BP’s performance once again underscored the stark contrast between the oil giant’s lucrative profits and companies grappling with a deepening cost-of-living crisis.
The world’s largest oil and gas companies have smashed profit records in recent months after Russia’s invasion of Ukraine sparked a surge in commodity prices.
For many fossil fuel companies, the immediate priority appears to be returning cash to shareholders through buyback programs.
Last week, BP’s UK rival Shell posted record second-quarter results of $11.5bn and announced a $6bn share buyback programme, while British Gas owner Centrica posted a big first-half profit. Dividends have since been restored.
Environmental activists and unions have condemned the oil majors’ skyrocketing profits and called on the UK government to take meaningful steps to reduce the cost of rising energy bills.
Last month, a bipartisan group of British lawmakers call on the government Increase support levels to help families pay rising energy bills and create a nationwide home quarantine plan.
The price cap for the most widely used consumer energy tariff is expected to rise by more than 60% in October as petrol prices soar, with the average household’s annual dual-fuel bill set to exceed £3,200 ($3,845).
Fuel poverty charity National Energy Action has warn If this happens, it will push 8.2 million households – or one in three UK households – into energy poverty. Fuel or energy poverty is when households are unable to heat their homes to the proper temperature.
“Obviously not everyone is battling an energy crisis,” Sana Youssef, an energy campaigner for Friends of the Earth, said in response to Shell and Centrica’s results. “Millions of people across the UK facing skyrocketing energy prices will be greeted with incredible profits.”
Youssef called on the UK government to impose tougher windfall taxes on energy companies. “The bulk of these profits should be used to insulate our homes and help cash-strapped families pay for heating this winter, rather than developing more Earth-burning fossil fuel projects,” Yusuf said.
The burning of fossil fuels such as oil and gas is a major driver of the climate crisis, with researchers finding that fossil fuel production remains “dangerously out of sync” with global climate goals.
UN Secretary-General António Guterres, speaking in June, called for a move away from fossil fuel financing, calling new funding for fossil fuel exploration “delusional.”