Trade association Offshore Energies UK (OEUK) has called for the Energy Profits Levy (EPL) to be removed by the end of the year.
The EPL was introduced by the then Conservative Government in response to price spikes in the price of oil following Russia’s invasion of Ukraine. Having been continued by the current Government, it imposes a top rate of tax on oil producers of 78%.
OEUK wants this axed in favour of a long-term mechanism that will encourage much-needed investment. The association has a diverse membership, including large companies like BP, the maker of the Castrol lubricant and coolant products.
David Whitehouse, the chief executive of OEUK, said the price of energy in the UK was higher than in many comparable countries, with energy imports meeting 40% of total demand. He said this was not a good situation given the uncertainty in the world. He added that seeing as:
“…75% of our energy comes from oil and gas, the solution is the responsible production of our own oil and gas from the North Sea, alongside the build out of renewable energy. It should not be a debate about one form of energy versus another – we need it all.”
He also welcomed the fiscal consultation initiated by the Government, which closed on May 28. He said OEUK had participated constructively in the process.
Whitehouse said that unlocking investment in energy production in the UK would require a new, more transparent mechanism that clearly set out any response to price shocks in future.
