The British government announced that it would levy a new tax on oil companies’ profits (expected to result in £2 billion ($3.2 billion) in additional taxes) in order to shift the pain felt by many consumers as a result of triple-digit crude prices. In exchange for this new tax on oil companies, the British government will lower the country’s gas tax to consumers by a penny a litre.
The new tax will hit the bottom line of oil companies operating in the North Sea as these companies can expect their tax on production to grow from 50% to 62%. The effects of this announcement were felt by Canadian companies with North Sea interests as shares fell in Nexen Inc., Suncor Energy Inc., Talisman Energy Inc. and Canadian Natural Resources Ltd.
This move by the British government has stirred speculation about copycat measures around the world as political leaders seek to dip into high crude prices.