Hours after meeting with UK’s Prime Keir Starmer, U.S. President Donald Trump hit out at the high taxes on the North Sea oil industry in yet another criticism of Britain’s energy policies.
“North Sea Oil is a TREASURE CHEST for the United Kingdom. The taxes are so high, however, that it makes no sense,” President Trump posted on Truth Social after visiting Scotland and Aberdeenshire, the heart of the UK oil and gas industry.
“They have essentially told drillers and oil companies that, “we don’t want you.” Incentivize the drillers, FAST. A VAST FORTUNE TO BE MADE for the UK, and far lower energy costs for the people!” President Trump added.
This isn’t the first time President Trump has criticized the energy policy of the United Kingdom. Since winning the election in November, he has repeatedly called for the UK to incentivize oil and gas production and “get rid of” wind farms.
Starmer’s ruling Labour Party last autumn raised the windfall tax on UK North Sea operators to 38% from 35%, effective November 1, 2024. The tax will now expire on March 31, 2030, a year later than the previous tax regime. The government also removed the 29% investment allowance.
With this policy, the effective total tax rate on the oil and gas operators in the UK North Sea was raised to 78%, which is one of the highest in the world.
The UK’s Energy Profits Levy (EPL), as the windfall tax is officially known, will remain in place until 2030. The government has launched a consultation on what type of tax regime should come next.
Since the tax was initially introduced by the Conservative government at the height of the energy crisis in 2022, oil and gas companies operating in the UK North Sea have been calling for certainty in the regulatory and tax framework. Recent changes in policies and the rising taxes have driven away operators, who say that a lack of North Sea investments would only make the UK more dependent on oil and gas imports.
By Charles Kennedy for Oilprice.com
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