Union attacks Shell profit levels
Unions and motoring groups have reacted with outrage to the record profits posted by Shell.
The oil giant officially posted profits of £9.3 billion this morning, the largest ever achieved by a UK company.
This is an increase of 38 per cent on 2003 figures and has largely been credited to high oil prices and refining process profit margins.
Shell achieved better results than expected in the fourth quarter and, as a result, is now reported to be making a profit of £295 per second.
Shell will pay back most of the profit in dividends to its shareholders
Tony Woodley, general secretary of the Transport and General Workers Union, said the profits were excessive and “obscene”.
He called on the Government to bring in a windfall tax on the profits so that “everyone can benefit”.
Mr Woodley said: “Such levels of excess are, quite frankly, obscene. With our pensions in crisis these profits are 9.3 billion extra reasons for a windfall tax.”
Roger King, chief executive of the Road Haulage Association demanded to know why fuel prices were so high while such vast profits were being made.
He asked: “How is it that the oil companies have done so well out of a world crisis?
“Do we need to be paying the price we do for fuel? Why is diesel more expensive than petrol? Why do the oil companies tighten credit terms even harder citing high world prices as the reason?
“No doubt economists will give good reasons why the oil companies are doing so well but there is a moral question here based on fairness, on sharing the burden. We look forward to a reduction in fuel prices, and quickly”.
However, Shell also announced a further reduction in its oil and gas reserves.
Shell was recently fined by both the Financial Services Authority and the US Securities and Exchange Commission after it admitted to misleading investors about its reserves by releasing figures that were 20 per cent higher than actual levels.
Jeroen van der Veer, Chief Executive, said: “2004 was a year of extremes, with the reserves recategorisation on one hand and record net income and cash generation on the other. Our performance demonstrates our financial and operational resilience, and the quality of our people and assets.”
He said that Shell had acted to end the reserves issue and expected to pay out at least $10 billion (£5.3 billion) in dividends in 2005 and re-launch its share buyback programme.
