The British multinational adjusted its earnings for the three months to the end of September to £8.2 billion – twice the profits of the same period last year.

Having profited to the tune of nearly £10bn earlier in the year, the company is on course for its most profitable year ever.

But despite this Shell does not expect to pay the windfall tax introduced by the Prime Minister while chancellor earlier this year because of its scale of investment.

Prime Minister Rishi Sunak (centre), alongside the Chancellor of the Exchequer, Jeremy Hunt, (centre right) holds his first Cabinet meeting in London. Picture: Stefan Rousseau - WPA Pool/Getty Images

Climate activists and opposition MPs are urging the Prime Minister to go further on his windfall tax as oil and gas giants see profits soar over Russia’s war in Ukraine.

Downing Street said “nothing is off the table” ahead of Chancellor Jeremy Hunt’s autumn budget on November 17.

Shadow climate change secretary Ed Miliband said Shell’s profits were “further proof that we need a proper windfall tax to make the energy companies pay their fair share”.

“Rishi Sunak’s existing plans are a pale imitation of Labour’s windfall tax and would see billions of pounds of taxpayer money go back into the pockets of oil and gas giants through ludicrous tax breaks,” he said.

“It tells you everything you need to know about whose side this Conservative Government is on that they refuse to back Labour’s proper windfall tax whilst working people, families, and pensioners suffer.”

In May, Mr Sunak introduced a windfall tax that strongly incentivised firms to invest by including tax relief in exchange for investment.

He announced the 25 per cent surcharge on extraordinary profits to help pay for a package of support for households struggling with the cost-of-living crisis.

His plans are due to lapse at the end of 2025 or sooner if oil and gas prices return to “historically more normal levels”, as Russian president Vladimir Putin’s invasion pushes up prices.

Shell finance boss Sinead Gorman said the company had done enough through significant capital expenditure in recent months to avoid the tax.

“Heavy capex has meant that we haven’t had extra tax coming through in this quarter yet,” she said.

“I do expect to see that extra tax … to happen quite early in the first quarter of 2023, but we’ll see what plays out with prices as well.”

She added: “We simply are investing more heavily than we have, and therefore we don’t have profits which we can be taxed against.”

Greenpeace called for a “proper tax” on the energy giant’s profits as they continue to bank billions.

Liberal Democrat leader Sir Ed Davey said: “The Conservative Government’s refusal to properly tax these eye-watering profits is an insult to families struggling to pay their energy bills.

“Even the chief executive of Shell has admitted that oil and gas companies should be taxed more to help protect vulnerable households.

“It’s time Rishi Sunak introduced a proper windfall tax and used the extra money to support people facing heart-breaking choices this winter.”

Asked on LBC radio about an extended windfall tax, Tory party chairman Nadhim Zahawi said “absolutely the Chancellor and the Prime Minister will look at every decision”.

But he warned against creating “a tax system that disincentivises investment”.

The Prime Minister’s official spokesman said: “I am not going to get into tax measures ahead of a fiscal event.

“It is accurate to say, as we made clear, no options are off the table given the economic circumstances. But clearly that is for the autumn statement.”

Mr Sunak does not believe the existing levy has been hindering investment, the spokesman said.

Banks have also been enjoying bumper profits as they benefit from rising interest rates.

Downing Street did not rule out a windfall tax on them either, with the spokesman saying: “I haven’t asked the Prime Minister directly, but broadly speaking hypothetical tax measures are for a fiscal event.”

The announcement on Shell profits came as Downing Street confirmed Mr Sunak would not be attending COP27 in Egypt next month.

Mr Sunak’s predecessor Liz Truss had been planning to attend the UN climate summit in November, but the new Prime Minister has pulled out of attending citing “domestic commitments” ahead of the Autumn Budget.

Downing Street also confirmed climate minister Graham Stuart will no longer be attending Cabinet.

A No. 10 spokeswoman said the Prime Minister would not be travelling to the conference in November in part due to preparations for the Autumn Budget on November 17.

She said: “The Prime Minister is not expected to attend COP27 and this is due to other pressing domestic commitments, including preparations for the Autumn Budget.

“The UK will be fully represented by other senior ministers, as well as COP President Alok Sharma.”

Downing Street said the Prime Minister remained “absolutely committed” to supporting the climate conference, denying the decision to skip the global meeting signalled a downgrading of climate change as a priority.

The spokeswoman said: “It is a recognition of other pressing domestic commitments, not least preparations for the Autumn Budget.”

She said: “We remain committed to net zero and to leading international and domestic action to tackle climate change. The UK is forging ahead of many other countries on net zero.

“We will obviously continue to work closely with Egypt as the hosts of COP27 and to make sure that all countries are making progress on the historic commitments they made at the Glasgow climate pact.”

It was also confirmed this week Mr Sharma had lost his seat around Mr Sunak’s Cabinet table.

Rishi Sunak leadership: Prime Minister urged to expand windfall tax as Shell’s profits soar

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