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Shell Plc said surging margins from fuel production could have added more than $1 billion to the earnings of its refining business last quarter, when gasoline prices broke records in several countries.
The trading update from the London-based energy giant is the first indicator of just how much cash was flowing into the coffers of major oil companies due to the inflationary surge in the price of gasoline, which rose above $5 a gallon in the US for the first time.
While the rising cost of energy is strengthening the oil majors after several tough years, it risks a political backlash. US President Joe Biden has directly called on fuel retailers to cut prices and companies are facing windfall taxes in some countries.
Shell’s indicative refining margin jumped to $28.04 a barrel in the second quarter, up from $10.23 in the first three months of the year, the company said in a statement on Thursday. That increase is expected to have a positive impact of between $800 million and $1.2 billion on the results of the company’s products division, compared with the prior period.
