Business is booming.

MAGGIE PAGANO: Fossil fuels are here to stay until cleaner technologies are developed

When BP makes staggering profits — as the oil and gas giant did between April and June this year — investors are rewarded with juicy dividends. That is nothing more than fair and the foundation of a publicly traded company owned by its shareholders.

But when BP plunged into the red – as it did a few years ago in the midst of the Covid pandemic when demand slumped – investors saw their payments cut by half. That is only fair, they shared in the risk.

Still, CEO Bernard Looney didn’t beg the government for a bailout like so many other companies did.

'The outrage over BP's sparkling £6.9bn profit is so childish, if not unfair'

‘The outrage over BP’s sparkling £6.9bn profit is so childish, if not unfair’

Instead, he started self-help, cutting costs, paying off debt, investing more in renewable energy, and generally getting the house in order.

That’s partly why the company has done so well, with a rare 4 percent rise in its share price. That’s why the outrage over BP’s sparkling profit of £6.9 billion is so childish, if not insincere.

BP’s profits have soared as the price of oil has risen 40 percent in the past year, while that of natural gas has risen 100 percent.

It’s worth reminding those at Westminster and Green campaigners who criticize BP’s ‘stunning profits’ and its outrageous ‘free-lance pursuit of profit’ that BP is a price taker, not a price giver.

The oil and gas giant – along with other energy giants such as Shell and Centrica – has benefited from the disruptions in the energy market caused first by the renewed demand in the post-lockdown period and then from the disastrous effects of the Russian invasion of Ukraine.

But the nature of their volatile markets means that these companies will always go from extreme loss to profit, and no doubt back to losses again.

The price of oil is indeed very sensitive to even the smallest changes in demand, and is falling rapidly as oil-producing countries, members of OPEC, try to get more of the black stuff out of the ground.

It’s also worth recalling that just a few years ago, BP and Shell were the outcasts, shunned by the banks, insurers and asset managers like dirty fossil fuel dinosaurs, forcing them to exploit many of their best oil and gas fields. to sell in the drive to go green.

Today they are the rescuers, pumping out oil and gas as fast as they can to compensate Russia for choking gas supplies to Europe in retaliation for criminal sanctions.

Of course, the optics aren’t great with household energy bills skyrocketing to £3,600 a year, or more.

It is time for politicians to agree with their citizens – that we are trapped in a dichotomy of complex choices.

There are enough fossil fuels to sustain us for centuries to come, which are cheap and efficient. But the pressure of net-zero targets means that governments have opted for energy sources that are expensive and not as efficient.

There are no easy solutions, only tough choices, such as lowering green taxes on fuel and electricity until this crisis is over.

Or even more unsavory. As broker AJ Bell’s Russ Mold says, leaders could go on bended knees to Caracas, Tehran and Moscow and argue for turning on the oil taps in exchange for sanctions ending. That’s not going to happen anytime soon.

Buying shares in BP and Shell is a better bet. Like it or not, hydrocarbons are here to stay until cleaner and cheaper technologies are developed.

Higher rates work

Early days, but home prices rose just 0.1 percent in July, according to Nationwide. In the past year, the increase was 11 percent. So the July figure suggests the market is cooling and likely to continue if the Bank of England continues its 0.5 percentage point gain tomorrow.

Still, house prices – the average is now £271,000 – remain remarkably resilient due to the ongoing shift to work from home, the tight labor market and a housing shortage.

More than ever we need the next prime minister to come to a joint housing policy. He or she would have to follow Churchill’s order to his housing secretary Harold MacMillan after the former narrowly won the 1951 election: “Build the houses for the people.”

Crisis? Which crisis?

Ferrari is selling more of its flashy cars than ever in its history, with 3,445 shipped around the world in the last quarter. Sales to China, Taiwan, Hong Kong more than doubled and increased by 60 percent in the US.

The rich are different from you and me.

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