ENERGY giant Shell has announced record annual profits having doubled in a year to $39.9bn (£32.2bn) afer energy prices surged in the wake of Russia's invasion of Ukraine.

The gains of Europe's largest oil and gas company have doubled from a year earlier and are the highest in its 115-year history, outstripping the previous record of $31bn in 2008.

The London-listed company also posted record fourth-quarter earnings of $9.8bn (£7.9bn).

It has heaped new pressure on firms to pay more by way of windfall tax as households struggle with rising bills in the cost of living crisis.

The majority of profits came from Shell's gas operations.

Shell indicated it expected to pay an additional $2.3bn (£1.87bn) in tax on its 2022 earnings because of the combined impact of the EU’s energy profits levy and the UK’s windfall tax.

Shell said it had distributed $26bn to shareholders in 2022 including $18bn in share buybacks.

It is the latest energy company to announce record profits as prices rose in the wake of the invasion.

Earlier this oil and gas firm Exxon Mobil recorded net profits in 2022 of $56bn (£45.25bn), a record high for the entire Western oil industry.

Anti-fuel poverty and environmental campaigners along with opposition parties have strongly criticised the extent of the Shell profits. Some have called for a greater windfall tax and for the planned increase in the energy price cap due in April to be scrapped.

Rishi Sunak introduced the tax when he was chancellor, describing it as a 25% Energy Profits Levy.

In the Autumn Statement, Chancellor Jeremy Hunt announced this would increase to 35% from January 2023, and stay in place until March 2028. It had previously been scheduled to finish at the end of 2025.

The Herald: Jeremy Hunt

The levy applies to profits made from extracting UK oil and gas, but not from other activities such as refining oil and selling petrol and diesel on forecourts. Mr Hunt said it would raise £40bn over six years.

Oil and gas firms also pay 30% corporation tax on their profits as well as a supplementary 10% rate. Along with the new windfall tax, that takes their total tax rate to 75%.

The government also introduced a temporary 45% levy on what it calls "extraordinary returns" from low-carbon electricity generators in the UK.

The Electricity Generator Levy will be paid from 1 January by larger generators. The government hopes it will raise about £14bn over six years.

SNP energy spokesman Alan Brown MP said: "The Tory government must scrap its outrageous plan to raise the energy bill price cap again in April - and guarantee the Energy Bill Support Scheme payments for households will continue.

"People will feel sick that, instead of helping ordinary families, the Tories are allowing big energy companies to make record profits and are forcing taxpayers to subsidise shareholders.

"The Chancellor should follow the lead of other countries by taxing share buy backs, and expanding the windfall tax, to fund support for households.

"Scotland is an energy-rich country. With the full powers of independence we can escape Westminster control, deliver energy security and bring household bills down permanently."

Friends of the Earth Scotland’s oil and gas campaigner Freya Aitchison said the "obscene" profit showed the "scale of the harm that these companies are inflicting on households and businesses. Oil company bosses and shareholders are being allowed to get even richer by banking huge profits, while normal people are facing enormous energy bills and millions are being forced into fuel poverty."

Shell chief executive Wael Sawan said: "Our results in Q4 and across the full year demonstrate the strength of Shell's differentiated portfolio, as well as our capacity to deliver vital energy to our customers in a volatile world.

"We believe that Shell is well positioned to be the trusted partner through the energy transition."