: U.K. says it will withdraw windfall oil and gas tax — if prices drop below these levels

The U.K. government on Friday said it will keep a windfall profit tax on oil and gas companies in place, unless both oil and natural gas prices fall below their 20-year averages.

The tax of 75% on North Sea oil and gas production will remain in place for five years, until there are two straight quarters where oil averaged below $71.40 per barrel and gas averaged below 54 pence per therm of gas. The last time monthly average prices were at or below this level was in March 2021 for gas and August 2021 for oil.

The rate will drop back down to 40% if both conditions are met, the U.K. Treasury said.

Brent crude BRN00, -0.29% was trading at over $76 per barrel on Friday, and UK natural gas prices GWM00, +19.89% were at 71 pence per therm.

The tax so far has raised £2.8 billion ($3.5 billion), which the government said paid for nearly half the support given to households for energy bills. The levy is expected to raise £26 billion by March 2028.

The tax has landed on the shoulders of oil and gas producers including BP BP, -0.86%, Shell SHEL, -1.21% and TotalEnergies TTE, -0.58%.

Harbour Energy HBR, +1.91%, a North Sea producer whose shares were hit when the tax was first announced, saw its shares rise 3% on Friday. Another producer, Serica SQZ, +3.14%, also had its shares rise 3%.