BP benefits from record oil prices

Oil giant BP has reported a 148% increase in third-quarter profits to $10 billion (£6.4 billion) compared to the same period in 2007, far exceeding analysts expectations.

However, despite the profit increase, the company will no doubt be under fire amid concern that oil companies are not passing on the benefits of lower oil prices to consumers who have been hit with soaring petrol costs.

Meanwhile, other companies not passing the benefits to consumers are electricity and gas firms, who claim there is a delay in the system which means price falls will only filter through in 2009.

Over the weekend, average petrol prices fell below the £1 per litre mark for the first time in 12 months but much more aggressive cuts are required, according to experts.

Consequently, Downing Street is being plagued with calls urging these firms to pass on lower prices to motorists and householders.

An international energy summit is scheduled to take place in London later this year to look at ways of lowering oil prices, according to sources at Downing Street.

As a consequence of higher profits, BP has increased its dividend payments, which are roughly 60% more than last year and according to BP chief executive, Tony Hayward, the firm is delivering its promises to shareholders.

Following the news, shares in the oil company soared 26p to 464p, however, analysts warned that the collapse in the oil price meant the short-term outlook will be far more challenging.

The price of oil has fallen from a high of $147 a barrel in July to just $62 a barrel currently, due to fears that a global recession will cut demand for oil.

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