Windfall tax u-turn drags down London-listed energy titans

London-listed energy companies that will be caught by Chancellor Rishi Sunak’s windfall tax tumbled during opening exchanges today.

The capital’s premier FTSE 100 index was flat this morning at 7,564.82 points, while the mid-cap domestically-focused FTSE 250 index, which is more aligned with the health of the UK economy, jumped 0.52 per cent to 20,354.82 points.

Sunak yesterday launched a tax raid on oil and gas companies to transfer excess profits from the sector booked as a result of Russia’s invasion of Ukraine sending energy prices soaring to households struggling with rising living costs.

The sector will be subjected to a 25 per cent surcharge on their profits. However, under a new tax relief scheme, the likes of Shell and BP can offset around 90 per cent of their investment spending against their tax bill, Sunak said.

BP and Shell were among the worst performers on the FTSE 100, each losing around one per cent.

SSE also fell 3.14 per cent due to investors ditching shares in the energy company after Sunak said other energy firms may eventually be subjected to the surcharge.

FTSE 250-listed Drax Group tumbled over four per cent.

Industrials offset losses in London, with miners Antofagasta, Anglo American and Glencore all rising more than one per cent.

The pound gained ground on the greenback, strengthening 0.16 per cent to buy $1.2613.