Government to Scrap Windfall Tax on Oil and Gas Firms if Energy Prices Fall to Normal Levels
The government has announced that the windfall tax on oil and gas firms will be scrapped if energy prices fall to normal levels for a sustained period.
The windfall tax was introduced last year to help fund a scheme to lower energy bills for households and businesses.
Energy firm profits have soared recently due to rising demand after Covid restrictions were lifted and then because of Russia's invasion of Ukraine which raised energy prices.
But oil and gas prices have now come down from their highs.
The windfall tax, called the Energy Profits Levy, will end if average oil and gas prices fall to, or below, a set level for two consecutive three-month periods.
If not, the tax will remain in place until March 2028.
The level has been set at $71.40 per barrel for oil and £0.54 per therm for gas.
Energy firms have been urging ministers to reduce the windfall tax, warning that it was causing companies to pull back investment.
The Treasury said its decision had reflected those concerns and any fall in investment "puts the long-term future of the UK's domestic supply at risk, meaning we would be forced to import more from abroad at a time when reliable and affordable energy is a focus for families and businesses." The article is discussing the use of a government subsidy for coal mining communities in the UK.
The subsidy was intended to help insulate homes and transition the country to cheap, clean energy.
However, the article suggests that the money is instead being used to line the pockets of wealthy shareholders.
Energy firm profits have soared recently due to rising demand after Covid restrictions were lifted and then because of Russia's invasion of Ukraine which raised energy prices.
But oil and gas prices have now come down from their highs.
The windfall tax, called the Energy Profits Levy, will end if average oil and gas prices fall to, or below, a set level for two consecutive three-month periods.
If not, the tax will remain in place until March 2028.
The level has been set at $71.40 per barrel for oil and £0.54 per therm for gas.
Energy firms have been urging ministers to reduce the windfall tax, warning that it was causing companies to pull back investment.
The Treasury said its decision had reflected those concerns and any fall in investment "puts the long-term future of the UK's domestic supply at risk, meaning we would be forced to import more from abroad at a time when reliable and affordable energy is a focus for families and businesses." The article is discussing the use of a government subsidy for coal mining communities in the UK.
The subsidy was intended to help insulate homes and transition the country to cheap, clean energy.
However, the article suggests that the money is instead being used to line the pockets of wealthy shareholders.