Huge profits for fossil-fuel giants Woodside and Santos stoke calls for windfall tax

Soaring profits by Australian-based fossil-fuel exporters have renewed calls for the Albanese government to impose a tax on windfall earnings that have little to do with the companies’ performance.

Independent senator David Pocock, the former Labor foreign minister Bob Carr and energy analyst Tim Buckley are among those pressing the government to match nations like the UK and Indonesia in clawing back some of the super-sized profits.

Woodside Energy, the country’s largest energy producer, on Tuesday capped a string of bumper results by oil, gas and coal producers that have been buoyed up by record fuel prices as a result of Russia’s invasion of Ukraine in February.

• Sign up to receive an email with the top stories from Guardian Australia every morning

The Perth-based company said its net profit after tax rose five-fold in the June half to US$1.64bn (A$2.4bn). Prices for a barrel of oil equivalent more than doubled to US$96.40, while Woodside’s purchase of BHP’s oil and assets boosted earnings in June.

Woodside’s results follow Whitehaven Coal’s record annual net profit after tax of US$2bn for the year to June, up from a loss a year earlier. Its EBITDA result, which takes in depreciation and amortisation, rose 15 times to top US$3bn as the average coal price more than tripled from an average of A$95 per tonne to A$325.

Another standout was Santos, which reported that its June-half profit quadrupled to US$1.267bn. Production, by contrast, rose by almost 9% to the equivalent of 51.5m barrels of oil.

Related: ‘Grotesque greed’: immoral fossil fuel profits must be taxed, says UN chief

Treasurer Jim Chalmers and other ministers have repeatedly ruled clawing back some of the excess profit, arguing that the government’s main focus is addressing multinational tax reforms. The Australian Competition and Consumer Commission (ACCC) also this month flagged concerns that gas production in eastern Australia was highly concentrated, with just three companies ultimately controlling about 90% of supplies.

Energy companies and their industry groups have also rejected demands for them to pay extra taxes. They are also anxious other jurisdictions don’t follow the example of Queensland, which in June introduced new tiers for coal royalties, a move likely to reap billions of dollars for that state.

“We paid approximately $A700m in Australian taxes, royalties and excise in the first half of this year,” the Woodside chief executive, Meg O’Neill, said on Tuesday.

Head of NSW Minerals Council, Stephen Galilee said royalties were “just one of many taxes paid by mining companies as well as corporate tax, payroll tax, land tax and many other fees, charges and levies”.

“Imposing a Queensland-style increase in NSW would likely only deliver a short-term revenue gain, while inflicting great damage to the reputation of NSW as a place to invest,” he said, adding coal royalty rates were already almost double those for other minerals.

Advocates for a special levy, though, say the revenue raised could be used for many purposes, from shrinking budget deficits to funding the diversification of regional economies to help them reduce dependence on climate change-inducing fossil fuels.

“There’s a very strong case for a windfall tax,” Pocock told Guardian Australia, adding that it’s little wonder the producers have pushed back. “These are powerful companies with a lot of money to throw around – and even more now.”

Pocock said he had been seeking a meeting with Chalmers. A “royalties for the regions” scheme, as in Western Australia, would help set up the Hunter valley and Queensland’s coal and gas regions for the future, he said.

Carr told a recent gathering of the Evatt Foundation, a Labor thinktank, that fossil-fuel firms were enjoying “boom times through nothing they had done”. A windfall tax would help fund some of the expected jump in costs for the NDIS, education, defence and other spending.

Buckley, founder of Clean Energy Finance, said the companies were using public assets, often paid little or no corporate tax, and were now “war profiteers”.

He noted BHP’s BMA coking coal division in Queensland enjoyed a 73% return on its investment in just one year. Queensland’s new royalty scheme would only trim that to 60%, meaning the company would still have a big incentive to invest in the state.

“Now 60%, last time I checked, is six times the cost of capital,” Buckley said. “Whether you’re getting a seven times cost of capital or six times, you’re always going to invest.”

Guardian Australia approached BHP for comment.

The Australian Petroleum Production and Exploration Association (APPEA) chief executive, Samantha McCulloch, said the oil and gas industry already pays about $5bn to governments annually: “With more than $20bn invested in new supply over the past two years, the industry is also reinvesting profits in new supply to continue to deliver energy security and more economic benefits to Australia.”