The Guardian (UK): BP threatened with windfall tax: “Mr O'Neill threatened tougher regulation to prevent possible abuses by the five top gas producers who share 60% of the market. He asked why major producers such as BP, Shell and ExxonMobil believed they should be treated with kid gloves when it came to offshore controls. "Is it because you are multinational companies that [you think you] are bigger than the government?" he said.” (ShellNews.net) Posted 27 Jan 05
BP and other North Sea gas producers were warned by Labour politicians yesterday that they could face a billion pound windfall tax to compensate consumers for huge price rises in 2004.
Martin O'Neill, chairman of the trade and industry select committee which is investigating a gas price bubble, said after a clash with energy executives that he was "not against" a tax.
He tore into BP executives Steve Peacock and Alan Hayward telling them to "get their act together" on prices to stop a hole being created in the UK's manufacturing base.
Gas prices have risen by as much as 70% for industrial users and 20% for domestic consumers over the past 12 months.
Some estimates put the excess profits from these rises at £3.5bn and the industry is worried that Gordon Brown might repeat the £5.2bn windfall tax imposed on privatised utilities in 1997.
Mr O'Neill threatened tougher regulation to prevent possible abuses by the five top gas producers who share 60% of the market.
He asked why major producers such as BP, Shell and ExxonMobil believed they should be treated with kid gloves when it came to offshore controls.
"Is it because you are multinational companies that [you think you] are bigger than the government?" he said.
His ire was shared by committee colleague Judy Mallaber who repeatedly asked the representatives from BP and the UK Offshore Operators Association (UKOOA) whether it was right that consumers should struggle to pay energy bills while multibillion pound corporate profits were being made.
The Fuel Poverty Advisory Group, established by the government to eradicate energy hardship by 2010, called on the committee to make companies support its programmes "via taxation or voluntary agreement".
The consumer group energywatch said fines should be considered and a single regulator imposed for both onshore and offshore markets.
Established under the Utilities Act 2000, energywatch also demanded gas producers be made more transparent in their dealings.
There is concern that the sharp increases in gas prices last autumn were the result of gas providers deliberately withholding supplies from the market at a critical time.
UKOOA's chief executive Malcolm Webb blamed the media for publishing scare stories about possible blackouts due to a disruption of supplies.
Mr Hayward, BP's European gas expert, confirmed that gas providers had held back supplies but said this was because there were "genuine concerns" about whether there could be shortages in a severe winter.
In a written statement BP added: "BP does not believe there is any fundamental flaw in the UK market nor do we believe there has been any manipulation."
UKOOA said that any windfall tax would be negative for the development of the North Sea, and BP said higher gas profits would feed back to the Inland Revenue.
Asked whether he supported a new financial hit on the North Sea, Mr O'Neill said: "People have suggested that and I am not against it."
· E.ON, the German owner of Powergen and Midlands Electricity, said yesterday it planned to make a £420m special pension contribution which would wipe out more than half of a growing deficit.