The British government said in a statement on Friday that it will collect windfall tax from oil and gas until March 2028.
Energy companies saw their profit skyrocketed since the invasion of Russia in Ukraine in February 2022 that disrupted global supply. The measure was implemented in May last year to levy energy profits.
The tax level was as high as 75%, but it would reduce to 40% if prices return to normal levels for a sustained period, though producers voiced their concerns that the high tax level could have an impact on output in the long term.
However, the British government feared that its supply from the North Sea would be at risk if there were no changes, which would result in the country needing to rely on imported energy.
Based on 20-year historical averages, the government set the price floor at $71.40 a barrel for oil and 0.54 pounds per therm for gas.
