DAILY MAIL (UK): £1m an hour: Soaring oil prices help boost profits at BP… and Shell is making even more: “Its rival Shell, meanwhile, is expected to announce a quarterly profit of £2.6billion - which equates to £1.2million an hour.” (ShellNews.net)

By Ray Massey

Transport Editor

27 Oct 04

BP is making a staggering £1 million an hour profit as the price of crude oil soars, it emerged yesterday.

With drivers facing the prospect of paying £4 a gallon at the pumps, the firm revealed its quarterly profits had risen by 43 per cent to more than £2.1billion.

That means the oil giant is earning almost £270 a second.

Its rival Shell, meanwhile, is expected to announce a quarterly profit of £2.6billion - which equates to £1.2million an hour.

Both firms are expected to make around £9billion this year, the highest ever recorded by a British company.

The massive profits are being fuelled by the rise in the value of crude, which has topped $55 a barrel in New York for the first time.'

They come as prices at the pump creep towards the psychologically significant £4-a-gal-lon barrier. Since January, petrol prices have jumped 10 per cent to an average of £3.83 a gallon.

Motoring groups last night demanded to know why, despite making such huge profits, BP was not lowering its pump prices. RAG executive director Edmund King said many motorists 'will fail to understand how oil companies can make such vast profits yet not lower their prices for millions of drivers paying near record prices at the pumps'. Ray Holloway, of the Petrol Retailers' Association, added: 'It's bumper profits for the oil companies but more misery for motorists. 'With the oil price surges, it's a licence to print money. They can just sit there and watch it come pouring in.'

Mr Holloway said petrol prices had already hit £4 a gallon on motorways with diesel selling at £4.09. Unions accused BP of 'grotesque and scandalous profiteering' and demanded the Government impose a windfall tax on the company.

GMB general secretary Kevin Curran said: 'British motorists and the country's manufacturing industry are again the victims of oil industry arrogance.

BP denied it was profiteering, pointing out that it made very little from fuel sold at the pumps. Its chief executive, Lord Browne, said the firm was 'not ashamed' of making big profits. 'That is what large companies do,' he added. 'What happens to the money? It gets recycled. BP is supplying £1 in every £7 into pension funds. The price of oil has risen 65 per cent this year. UK petrol prices have risen 10 per cent.

'That says everything about the efficiency of the system. We have the lowest pre-tax price of petrol in Europe. We are not ashamed to say we make money in our retail segment.'

BP also pointed out that more than 70 per cent of the pump price is tax. Chancellor Gordon Brown stands to make billions of pounds in fuel duty but he is being urged to avoid more pain by cutting it and abandoning a proposed 2p-a-litre rise due in November.

Richard Freeman, of the AA, said: 'If it carries on at this rate we will soon see £4 a gallon. 'The price is already nudging the 85p-a-litre level we last saw during the fuel protests four years ago. 'The Government should cut fuel taxes. Otherwise the only thing that will stop it is a recession.'

The RAC acknowledged that tax was the main cause of high pump prices and that the majority of BP's profits were being made abroad, not from British motorists. 'BP controls every step of the process from getting the stuff out of the ground, refining it, to putting it into your fuel tank,' said a spokesman. 'We must not forget, however, that the real reason fuel is so expensive in the UK is the vast tax levied on it by Chancellor Gordon Brown, who takes 75p of every £1 we spend at the pumps.'

Experts are predicting the value of crude will stay high, with some warning that it could top $60 a barrel. The high price is being caused by a combination of political unrest in Nigeria's oil-producing region, instability in the Middle East, the impact of Hurricane Ivan on the oil-rich Gulf of Mexico and massive demand from China.