Outrage as high prices for gas and oil help Shell achieve record-breaking profit
Dutch politicians have expressed outrage after Royal Dutch Shell revealed on Thursday that 2022 had been a record-breaking year, thanks largely to the high prices for gas and oil. While households struggle to keep up with the rising cost of living, Shell managed to achieve its biggest annual profits seen in the company’s 125-year history.
Shell books record-breaking 38,5-billion-euro profit
It was already revealed last summer that Shell was seeing its profits rise significantly as a result of record-breaking gas and oil prices following Russia’s invasion of Ukraine last February. At the time, Shell CEO Ben van Beurden said these profits would, in part, be used to buy back shares and invest in more sustainable energy - although there has been some confusion about how much the company actually invests in sustainability.
Approximately six months on, and Shell has published its annual report for 2022. The figures reveal that, with an overall profit of almost 38,5 billion euros, the company has experienced one of its best years ever. Indeed, Shell saw its profits increase by more than 20 billion euros between 2021 and 2022.
2022 marked the first year that Shell was a wholly British company, with Van Beurden replaced as CEO by Wael Sawan. Last year, the British government introduced a windfall tax for profits made from oil and gas extracted on British soil - Shell reports that it has set aside around 2 billion euros to cover the new tax rate, which has not been included in the figure for annual profit.
Shell benefiting from rising prices amidst cost of living crisis?
Together, major global oil companies are known to have made almost 260 billion euros in profit in 2022 - almost 120 billion more than a year earlier, with NOS reporting that only BP recorded a loss.
Unsurprisingly, the news has sparked outrage around the world, as families and individuals struggle to keep up with rising prices and governments do what they can to limit the financial strain on households and businesses.
Members of the Dutch government have been amongst the critics, with members of parliament and the cabinet labelling the profits as “exorbitant”. Many have also called for higher taxes for oil companies, and for them to be required to invest profits in sustainability projects
Dutch Energy and Climate Minister left "stunned" by news
The Dutch Minister for Energy and Climate, Rob Jetten, was also angered by the news from Shell: "You're stunned when you read those numbers. And the first thing that comes to mind is: couldn't they have lowered their prices for consumers and businesses a bit?" He was quick to point out that, as Shell is no longer based in the Netherlands, there was little the government could do.
Shell’s new CEO Sawan expressed understanding of the public’s frustration. "These are incredibly difficult times. When I go back home to Lebanon, I see what people are going through. Sometimes they are without electricity for a whole day. Those are the kind of challenges we see in many places around the world,” he’s quoted as saying by NOS.
Sawan was, however, quick to add that the criticism targeted at Shell was unjustified, explaining that the company had worked to ensure energy supplies were available and delivered: “We managed to get 194 LNG shipments to Europe this year to make sure the lights stayed on where they would otherwise have gone off.”
Thumb: ElenaBaryshnikova via Shutterstock.com.