This chart comes from Trading Economics this morning and is already out of date because I gather that since I took the screenshot, the oil price has now reached $110 per barrel:
The FT presents broadly similar information:
The reason for showing the change is to emphasise two things. Firstly, there is the absolute price increase, with the price of oil increasing from around $65 per barrel to more than $100 a barrel in only a few days. The second is to show how exceptional this rate of change is. The increase is occurring at a faster rate than in 2022. We do not know where it will end as yet, but I suspect that it is nowhere near its peak at present.
The economic fallout of this for everyone in the UK and around the world is going to be staggering.
There is one thing that we do know now. This is that the exceptional profits that oil companies made in 2022 will recur. I sincerely hope that somebody has a plan to increase the tax rate on them to deal with this. The case for a windfall tax is going to be overwhelming. We need such a tax, and we need it now. There can be no justification for private sector gain at this moment at cost to the people of the world from enormous economic disruption.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
And a windfall tax on gas too, in view of your earlier post. The gas price will have a serious knock-on effect on electricity prices as well.
It’s another package of reasons why the Government needs to get itself into crisis management mode. It’s so obvious. Why isn’t it happening?
Who actually gets that money Richard? Presumably there are separate entities along the supply chain all the way through from producers to the traders, and not all will be getting windfall profits, or do they?. Our government should make sure all the gougers along the chain ‘pay us back’.
Hopefully, Clive Parry can give a bit of insight as to how the booty is carved up between the actors.
From past evidence a great deal of the game will go to the oil producing companies. Shell, BP and others had extraordinary profits in 2022 and thereafter. Where they split the gains two is a good question. They will probably attribute them to intermediate trading operations who will probably avoid UK taxation as a result.
This sounds like a plan to tax foreigners. There’s no new UK oil or gas exploration and the amount of production already out there is diminishing.
Don’t be stupid. It is about txaing excess profits made here. What is wrong with that?
Not forgetting of course those who will make a fortune from share values exploding upwards. Can you put a windfall tax on shareholder dividends?
I wonder how many had prior knowledge or ‘hunches’ that the prices would rise as much and placed their bets on the energy companies earlier this year or towards the end of last year?
I bet Venezuela is laughing it’s socks off now.