Shell has reported its second highest quarterly profits on record, with takings between July and September more than doubling.
The energy giant said underlying profits reached $9.5bn (£8.2bn) in the third quarter, compared to $4.2bn during the same period last year.
The figures prompted calls for the tax on the profits of energy firms to be raised to help people with bills.
Oil and gas prices have surged since Russia invaded Ukraine in February.
There are fears supplies could stretched as countries withdraw from importing the commodities from Russia. Oil and gas prices had already increased after economies reopened after Covid lockdowns.
Major energy companies have reported huge profits as a result, at a time when many governments are having to step in to support consumers with bills.
Between April and June Shell saw record profits of $11.5bn, although its profit growth has slowed since as oil prices fall back.
When he was chancellor, Rishi Sunak introduced a temporary levy on energy firms’ “extraordinary profits” which he said would raise £5bn .
But on Thursday Ed Miliband, Labour’s shadow climate change secretary said the plans were flawed and “would see billions of pounds of taxpayer money go back into the pockets of oil and gas giants through ludicrous tax breaks”.
He added that Shell’s profits were “further proof” the UK needed a higher windfall tax to make sure energy companies “pay their fair share”.
Frances O’Grady, general secretary of the TUC, said Shell’s profits were “obscene – especially at a time when millions are struggling with soaring bills”.
“The government has run out of excuses,” she said. “It must impose a higher windfall tax on oil and gas companies. The likes of Shell are treating families like cash machines,” she added.
A windfall tax is a one-off tax imposed to target firms that are lucky enough to benefit from something they were not responsible for – in other words, a windfall.
However, the government’s tax only applies to profits made in the UK which, for most oil and gas companies, is a small part of their operations.
When it was announced, the Energy Profits Levy was also accompanied by a measure that allows energy companies to apply for tax savings worth 91p of every £1 invested in fossil fuel extraction in the UK.
The move prompted Labour to accuse the government of handing money to oil companies that could have been used to support households.
Asked if the government should raise the windfall tax on firms, government minister Nadhim Zahawi told the BBC’s Today programme that Shell and other energy giants pay “double the corporation tax” of other businesses as well as the windfall tax.
He added that the existing levy was introduced in a “very smart way” because incentivised investment.
“We need [energy firms] to invest in the North Sea assets to grow our production,” he added.
Oil and gas firms operating in the North Sea are taxed differently to other firms, and their taxes on profits are higher. They pay 30% corporation tax on their profits and a supplementary 10% rate on top of that. Other firms pay corporation tax at 19%, but this is set to rise to 25% in April 2023.
However, oil and gas firms have been able to reduce the amount of tax they pay by factoring in losses or spending on things like decommissioning North Sea oil platforms. It means in recent years, the likes of BP and Shell have paid almost no tax in the UK.
So far this year, Shell has reported profits of $30bn which is more than double the amount it made over the first nine months of 2021. The company plans to reward its shareholders with a 15% increase in its regular dividend and is on track this year to beat its record annual profit of $31bn in 2008.
Stuart Lamont, an investment manager at RBC Brewin Dolphin, said the higher payout from Shell to its shareholders “may well raise a few eyebrows” at a time when UK households are facing surging energy bills.
Fellow energy company TotalEnergies also released bumper results on Thursday, posting third quarter profits of $9.86bn compared with $4.77bn a year ago.
