Business

BP profit surges to record $28bn, dividend increased

Published

8 months ago

February 7, 2023

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BP profit surges to record $28bn, dividend increased

BP on Tuesday reported a record profit of $28 billion for 2022, lifted by the surge in energy prices since Russia’s invasion of Ukraine, while boosting its dividend in a sign of confidence as it scaled back plans to reduce oil and gas output by 2030.

BP’s announcement of a record profit follows similar reports from rivals Shell (SHEL.L), Exxon Mobil (XOM.N) and Chevron (CVX.N) last week.

“We are strengthening BP, with our strongest upstream plant reliability on record and our lowest production costs in 16 years, helping to generate strong returns and reducing debt for the eleventh quarter in a row,” Chief Executive Bernard Looney said in a statement.

BP’s fourth-quarter underlying replacement cost profit, the company’s definition of net income, reached $4.8 billion, narrowly missing a $5 billion forecast in a company-provided survey of analysts.

That compared with $4 billion a year earlier and $8.2 billion in the third quarter of 2022.

For the year, BP’s profit of $27.6 billion exceeded the previous record of $26 billion in 2008.

The results were impacted by weaker gas trading activity after an “exceptional” third quarter, higher refinery maintenance and lower oil and gas prices.

BP shares rose 3.4% after trading opened in London.

BP boosted its dividend by 10% to 6.006 cents per share. It halved its dividend to 5.25 cents in July 2020 for the first time in a decade in the wake of the pandemic.

The company also announced plans to repurchase $2.75 billion worth of shares over the next three months after buying $11.7 billion in 2022.

Looney took the helm three years ago with an ambitious plan to pivot BP away from oil and gas towards renewables and low-carbon energy in an effort to slash greenhouse gas emissions.

While many investors backed Looney’s strategy, BP’s shares have been the worst performers among top Western energy companies since he took office, remaining largely flat compared with 17% gain for Shell and a nearly 80% gain in Exxon shares.

In a strategy update, BP said it now aims to produce 2 million barrels of oil equivalent per day by 2030, down 25% from 2019 levels, but less ambitious than previous plans to cut output by 40% over the period.

BP said it will increase spending on its oil and gas business by $1 billion a year, or up to a cumulative $8 billion by 2030.

At the same time, the company also increased spending plans for its energy transition investments by $1 billion a year over the same perid.

It increased the upper range of its forecast overall annual investments to 2030 to $14 billion to $18 billion from $14-$16 billion previously.

The company said it will increase its focus on low-carbon bioenergy and also set a target to produce 0.5 million-0.7 million tonnes a year of low or zero-carbon hydrogen to initially supply its own refineries.

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Business

Nepra approves Rs3.28 per unit increase in power tariff

Published

2 days ago

September 23, 2023

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Nepra approves Rs3.28 per unit increase in power tariff

The National Electric Power Regulatory Authority (Nepra) has approved Rs3.28 per unit increase in power tariff on the account of fuel cost adjustment for fourth quarter of fiscal year 2022-23.

The regulatory body has sent his decision to the federal government for final approval. The increase in electricity prices will come into effect immediately after it is approved by the government.

The distribution companies (Discos) would recover Rs159 billion from consumers during the period of six months (October 2023 to March 2024).

The revised rate will be applicable on all customers.

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Business

Inflation goes up as people feel effects of fuel price hikes

Published

2 days ago

September 23, 2023

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Inflation goes up as people feel effects of fuel price hikes

Food and fuel prices continue fuelling inflation in Pakistan as the Sensitive Price Indicator (SPI) for the week ended September 21 witnessed a 0.93 per increase amid the complete government failure to check the rates.

Read more: Food prices owing to weaker rupee, supply shortages will push Pakistan inflation: ADB

The latest data released by the Pakistan Bureau of Statistics (PBS) shows that chicken price had jumped by 8.49pc followed by petrol 8.51pc, diesel 5.54pc garlic 5.19pc and onion 3.02pc.

At the same time, the year-on-year increase in SPI stood at 38.66pc when compared with the corresponding week of last year.

Read more: More food inflation as fuel price hikes increase production, transportation costs

The rising inflation in Pakistan urgently needs government intervention and a study of how different governments are dealing with the challenge. Tax on cut on food items is one of methods.

Read more: Fighting the food inflation: From net-zero VAT to supermarkets seeking price cuts

Earlier this week, the Asian Development Bank (ADB) had warned that average inflation in Pakistan will soar to 29.2 per cent caused by supply shortages, continued currency depreciation, import restrictions, and fiscal stimulus for post-pandemic recovery.

Meanwhile, the rising food prices shouldn’t be a surprise given that the regular fuel price hikes are increasing the production and transportation costs.

The main reason behind the persistent inflation in Pakistan is devaluation as the rupee had dropped to the record against the US dollar – a trend that is being reversed somewhat amid a crackdown on blacking marketers on hoarders.

However, the exchange rate is still too high, requiring further correction, as the people have also been hit hard for power and gas tariffs as the conditions set by the International Monetary Fund (IMF).

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Business

Power tariff hikes: The more you devalue rupee, the more capacity charges you pay

Published

6 days ago

September 19, 2023

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Power tariff hikes: The more you devalue rupee, the more capacity charges you pay

Devaluation – a process that started under former finance minister Miftah Ismail in late 2017 and late 2018 but gained momentum under the PTI government – is the root cause of inflation shouldn’t be a contested statement as it has made imports even more expensive for Pakistan.

And that’s countries like Pakistan are the worst affected due the rising commodities prices in global market as weaker currencies mean the overall impact is much deeper for them than the rest.

Read more: Rupee collapse is the reason behind all ills Pakistan is facing

This argument was endorsed by none other a high-ranking government official – Power Division Secretary Rashid Langrial who said on Monday that the capacity [charges] payment had doubled after the dollar exchange rate increased from Rs100 to Rs300, thus resulting in skyrocketing electricity tariffs for consumers.

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