Shares of British power firms slide after windfall tax report

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Shares of British power companies fell on Tuesday after a news report suggested plans for a possible windfall tax on অতিরিক্ত 10 billion ($ 12.6 billion) of excess profits made by UK companies.

British Finance Minister Rishi Sunak seeks to raise cash to help families facing high-energy bills, the Financial Times reported on Monday When asked for comment, the Treasury did not provide a specific response to the article.

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Shares of British power generators – Drax, Centrica and SSE – fell between 11% and 19%. They have been on track for their worst day since the epidemic began and STOXX was the worst performer in the Europe 600.

A spokesman for Drax pointed to the company’s 5 billion investment program, which includes key infrastructure projects that will help create jobs and secure the country’s energy security, but did not specifically comment on potential taxes.

SSE declined to comment, while Sentrica did not respond to a request for comment.

Sunak and British Prime Minister Boris Johnson urgently want to address rising fuel bills and how to pay for them, the FT reported, citing unnamed officials. An announcement could come this week or early June, it added.

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“So far, politicians’ discussions have focused exclusively on the oil and gas sector, but we believe that the risk of this spread in the power sector is also increasing,” Citigroup said on Tuesday, lowering the rating of Drax shares to “neutral”.

Sunak said that if energy companies did not reinvest profits from rising oil and gas prices to jobs, growth and energy security, there was no alternative to the possibility of a windfall tax.

He told BBC Television this month: “I am not naturally attracted to their (windfall tax) concept but what I do know is that these companies are making significant profits at the moment due to their very high prices.”

The conflict in Ukraine, coupled with the rapid recovery in fuel demand as the Kovid-19 epidemic subsides, has helped keep oil and gas prices skyrocketing in recent months.

($ 1 = 7 0.7947) (Reporting by Siddharth S. and Jahnbi Nidumolu in Bangalore, Editing by Edmund Blair and Mark Potter Additional Report by Akankh Khushi)

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