Oil’s windfall and Treasury shortfall spark extra tax debate

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Record profits for Britains big oil companies, at a time when others are suffering from the effect of soaring fuel prices, have prompted calls for additional tax, which a deficit-hit Treasury may choose to listen to. Shell and BP insist that any 'windfall' tax now will worsen the oil shortfall later, by curbing their investment. But many of the other governments under which they operate have raised their mineral taxes, and still seen big exploration and production companies come back from more.

The last time Britain's oil companies reported record profits on the strength of high world prices, angry lorry drivers blockaded their depots in pursuit of a tax rebate. This time round, with Shell reporting gross profits up 9% to $27.6bn (13.9bn) in 2007, and BP expected to deliver similar figures,...

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