BP New Zealand reports bumper $230 million profit

Thursday, 23 June 2022

Filling up your tank is about to get a lot more expensive – and there’s not a lot the government can do about it. (Photo by Phil Walter/Getty Images)

BP New Zealand has reported a bumper $230 million after-tax profit for 2021, weeks after rival Mobil also reported a big increase in its profit for the year.

BP’s results, filed with the Companies Office, show BP’s revenues jumped 17% to $3.2 billion in the year to the end of December as oil prices rose.

The company’s profit for the year followed a loss of $103m in 2020.

Earlier this month Mobil reported a similar huge turnaround in the profitability of its New Zealand business, reporting a $183m profit, after a $159m loss the previous year.

* Average price of '91' cruises past $3 a litre

* Mobil posts $183m profit as confusion reigns over impact of refinery closure

Energy Minister Megan Woods explains how the price of crude oil is driving up the cost of petrol at the pump. (Video from May 6.)

BP’s accounts showed it earned a 31% return on the $730m of equity it reported at the start of last year.

The profit was recorded as petrol prices hit a record high, with the average price of a litre of ‘91’ sitting at $3.04 according to price comparison service Gaspy, and diesel at $2.91 a litre.

BP said in a statement supplied by spokesperson Gordon Gillan that its higher profit reflected a gain in the value of crude and refined fuels that it had on hand at end of 2020, which was then sold in 2021.

The price of fuel is currently likely to rise by 29 cents a litre in August, when a fuel-tax break first implemented by the Government in March is scheduled to end.

The AA predicted there would be long queues for petrol in the run-up to the tax break being withdrawn on August 14 unless the Government had a change of heart and instead decided to further extend the tax break or more gradually phase it out.

Z Energy last reported a profit of $92m for the six months to the end of September, turning around a prior-year interim loss of $58m.

The profits of the three major petrol companies rose sharply despite the first major recommendation from the Commerce Commission’s study into the fuel market taking effect in August.

Since then, they have been required to advertise a “terminal gate price” at which they will sell fuel in bulk to other retailers, in a move that the commission assessed would increase competition.