The government is planning to extend the windfall tax on oil and gas companies for another five years in a move which could net the Treasury nearly £40bn.
A report in The Times suggested that British prime minister Rishi Sunak and chancellor Jeremy Hunt want to maximise revenues from the windfall tax, by increasing the rate from 25% to 30% and extending it until 2028, adding the scheme will be expanded to cover electricity generators.
The report comes as four of the five largest global oil companies have now reported results, combining for nearly $50bn in net income, lifted by tight global supplies and disruption following Russia's invasion of Ukraine.
The size of the profits has revived calls from politicians and consumer groups to impose more taxes on the companies to raise funds to offset the hit to households, businesses and the wider economy from higher energy costs.
But industry bosses warned such a move would risk pushing away investments in the domestic industry.
The boss of Harbour Energy PLC (LON:HBR), the UK’s largest independent producer, said the Energy Profits Levy (EPL) has created uncertainty for operators like Harbour and said its investors are advocating for investments elsewhere.
“While we fully recognise the significant challenge in the UK to put public finances on a sustainable footing, we urge the government to carefully consider the consequences of any increase in or extension of the EPL,” chief executive Linda Cook said in a statement.