Oil giants share £7bn profits as drivers feel pinch at pumps

TWO of the world's biggest oil companies today posted combined record profits of more than £7 billion for the first three months of the year – at a time when motorists are facing record prices at the pumps.

BP's profits first quarter profits surged ahead by 48 per cent to £3.32 billion, while rival Royal Dutch Shell saw profits rise by 12 per cent to £3.92bn.

The strong profits growth comes at a time when consumers are paying almost £5 a gallon at the petrol station forecourt.

• PetrolWatch: Prices and availability in Edinburgh and the Lothians

But the companies claimed profits were mainly down to rising revenues from their exploration activities and not solely from forecourt rises.

Average oil prices now in excess of $90 (£45) a barrel have boosted the firms' exploration and production arms and offset tougher conditions in refining and marketing.

The latest figures for Shell follow a surplus of £13.9bn in 2007, equivalent to more than £1.5m an hour, while BP's profits fell by a more than fifth to £18.76bn last year as problems with its US refineries continued to dog the business.

Jeroen van der Veer, chief executive at Royal Dutch Shell, said: "Good operating performance, combined with increased oil and gas prices, offset the impact of downstream conditions in the first quarter 2008.

"We have delivered another competitive set of earnings for Shell's shareholders.

"Shell has the largest capital spending programme in our industry today, to grow the company and play our part in ensuring that energy markets remain well supplied. Our strategy is on track."

But today's figures have not been welcomed by some consumer and motoring groups.

Sheila Ranger, campaigns manager for the RAC Foundation, said the announcement would leave drivers feeling hard done by.

She said: "Motorists are going to feel very angry because they have been struggling with a triple whammy of high crude oil prices, high duty and tax imposed by the government and now high profits from the fuel companies.

"The price of fuel is becoming something many families are struggling with. This will be the last straw for some motorists."

Edinburgh South Labour MP and former Consumer Affairs Minister Nigel Griffiths said he would like to see a windfall tax on the profits.

"It is important not just shareholders, but the public benefit from high oil prices," he said.

And he said money raised from a windfall tax should be used to cut gas and electricity bills for hard-pressed consumers. According to the AA said UK motorists are now paying an average of 109.8p a litre for unleaded petrol, equivalent to £4.99 a gallon as crude oil reached a new all-time high of $119.93 a barrel.

Prices have also been driven higher by supply outages in Nigeria that have helped to support oil against a strengthening dollar.

Demand in the US is high for Nigeria's light, sweet crude, which is easily refined.

Louise Doherty of website petrolprices.com said motorists would be angered by today's profits announcement. She said: "Hauliers and the average motorist have been struggling while the oil companies make record profits.

"Prices have risen in the last ten days far more than you would normally expect. The retailers blame the oil companies and the oil companies blame the retailers, but at the end of the day, it's the motorists who are losing out."


Motorists face increases despite end of strike
MOTORISTS were today warned petrol prices could soar even higher over the coming weeks, despite the Grangemouth refinery strike coming to an end.

The price of oil hit a record high yesterday, but experts say this will take about six weeks to filter down to consumers.

It comes as workers returned to the plant in Grangemouth following a 48-hour strike.

Supplies of petrol and diesel are still running low in many parts of Edinburgh and the Lothians, with several service stations drying up.

Many outlets are continuing to limit purchases to £20.

Although the strike at Grangemouth is over, it will take two or three weeks before the facility is back to full production. There is also still the possibility of a further action, with no sign of an end to the dispute over the pensions.

The Unite union is to meet with the senior management of Ineos in London.

Louise Doherty of petrolprices.com, a consumer website, said the current uncertainty meant even higher prices at the pumps. She said: "We expect it to get worse over the next six weeks.

"There may be a dip in the short-term, but we expect them to hit £1.50 a litre by September. We've already had a 20p a litre rise in the last year. Edinburgh will be one of the first places to feel the increase, as prices are already fairly high."

The price of petrol in Lothian hit a new high over the weekend.

One Prestonpans garage was charging £1.25 a litre for unleaded, and some diesel was selling for £1.25 a litre.

A spokesman for the Motor Retail Industry Association, agreed prices were set to rise for several weeks.