August 3, 2022: -On Tuesday, U.K. oil giant BP increased its reward and share buybacks after tripling second-quarter profits on robust refining margins and trading.
The British energy major posted a second-quarter underlying reserve cost profit, used as a proxy for net profit, of $8.5 billion.
That compared with a gain of $6.2 billion in the sooner three months of the year and $2.8 billion for the second quarter of 2021. Analysts had predicted BP to report a first-quarter profit of $6.3 billion, according to Refinitiv.
BP yielded a 10% increase in its quarterly dividend payout to shareholders, increasing it to 6.006 cents for each ordinary share.
Shares of BP increased 4% in morning deals in London, which traded near the top of the pan-European Stoxx 600. The stock price increased over 23% year-to-date.
BP’s results underscore the stark contrast between Big Oil’s profit bonanza and those grappling with a deepening cost of living crisis.
The world’s huge oil and gas companies have shattered profit records in recent months following a surge in commodity prices prompted by Russia’s invasion of Ukraine. For many fossil fuel firms, the immediate priority appears to be returning cash to shareholders via buyback programs.
Last week, BP’s U.K. rival Shell reported record second-quarter results of $11.5 billion and announced a $6 billion share buyback program. At the same time, British Gas owner Centrica reinstated its dividend after a massive increase in first-half profits.
Environmental campaigners and union groups have condemned Big Oil’s increasing profits and called on the U.K. government to impose meaningful measures to bring down 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 get by,” Trades Union Congress General Secretary Frances O’Grady said in a statement.
“For a fair approach to the cost of living crisis, price hikes and profits should be held back. Ministers must do more to get wages rising across the economy. And we should bring energy retail firms into public ownership to reduce bills for basic energy needs,” O’Grady said.
Last month, a cross-party group of U.K. lawmakers called on the government to increase the level of support to help households pay rising energy bills and outline a nationwide plan to insulate homes.
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