Earnings of the oil company BP in the second quarter of 2022

A BP petrol station in Madrid, Spain.

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LONDON (AP) — British oil giant BP raised its dividend on Tuesday and prompted a share buyback after tripling second-quarter profit on strong refining and trading margins.

The major British energy company posted an underlying replacement cost profit in the second quarter, used as a proxy for net profit, of $8.5 billion.

That compares with a profit of $6.2 billion in the first three months of the year and $2.8 billion for the second quarter of 2021. Analysts had expected BP to report a profit of $6.3 billion in the first quarter, according to Refinitiv.

BP also announced a 10% increase in its quarterly dividend payout to shareholders, bringing it to 6.006 cents per common share.

BP shares rose 4% during morning trading in London, trading near the top of the pan-European Stoxx 600. The share price is up more than 23% so far this year.

BP’s results once again underscore the stark contrast between Big Oil’s earnings bonanza and those facing a deepening cost-of-living crisis.

The world’s largest oil and gas companies have broken profit records in recent months, following a spike in commodity prices triggered by Russia’s invasion of Ukraine. For many fossil fuel companies, the immediate priority seems to be returning cash to shareholders through buyback programs.

Last week, BP’s UK rival Shell reported record second-quarter results of $11.5bn and announced a $6bn share buyback programme, while British Gas owner Centrica reinstated its dividend after a massive increase in first half earnings.

cost of living crisis

Environmental activists and trade union groups have condemned Big Oil’s soaring profits and called on the UK government to impose significant measures to reduce the cost of rising energy bills.

“Every family should get a fair price for the energy they need. But with energy bills rising much faster than wages, high profits are an insult to families struggling to survive,” said Congressional Secretary General Unions, Frances O’Grady, in a statement. .

“For a fair approach to the cost-of-living crisis, price increases and profits must be contained. Ministers must do more to get wages to rise across the economy’s energy needs,” O’Grady said.

Last month, a cross-party group of UK lawmakers called on the government to increase the level of support to help households pay rising energy bills and outline a national plan to insulate homes.

A price cap on commonly used consumer energy rates is expected to rise by more than 60% in October due to rising gasoline prices, pushing households’ average annual dual-fuel bill to more than £3,200 ($3,845).

The energy poverty charity National Energy Action has warned that if this happens, it would push 8.2 million households, or one in three British households, into energy poverty. Energy or fuel poverty refers to when a household cannot afford to heat their home to an adequate temperature.

“Ministers must impose a much tougher windfall tax on the massive profits of oil and gas companies. It is unbelievable that these companies are racking up such huge sums in the midst of a cost of living crisis,” Sana Yusuf, energy campaigner at Friends of the Earth, said in reaction to BP’s earnings.

“It’s surprising that energy efficiency has been given such a low priority. A national insulation program would lower bills, reduce energy use and dramatically reduce climate-changing emissions,” Yusuf said.

The burning of fossil fuels, such as oil and gas, is the main driver of the climate crisis and researchers have found that fossil fuel production remains “dangerously out of sync” with global climate goals.

Speaking in June, UN Secretary-General Antonio Guterres called for an abandonment of fossil fuel funding, describing new funding for fossil fuel exploration as “delusional”.

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