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ECONOMY

Norway’s Equinor profits treble on sky rocketing gas prices

Norwegian energy giant Equinor said Wednesday a surge in gas prices triggered by the war in Ukraine caused its profits to more treble in the second quarter of 2022.

Pictured is an oil rig in Norway.
Equinor has announced massive profits. Pictured is a oil rig in Norwegian waters Photo by Jan-Rune Smenes Reite: https://www.pexels.com/photo/oil-platfrom-rig-in-the-middle-of-the-ocean-3207536/

Gas prices have soared after Russia, a leading supplier of natural gas, invaded Ukraine in February, leading to a slew of sanctions by the West and a move by Europe to cut its dependency on Moscow’s energy resources.

With oil prices averaging nearly $107 — 68 percent higher than a year earlier — Equinor booked nearly $6.8 billion in net profit between April and June, up from $1.9 billion in the same period of 2021.

Second-quarter sales more than doubled to $36.5 billion, Equinor said.

“Russia’s invasion of Ukraine impacted already tight energy markets and has created an energy crisis with high prices affecting people and all sectors of society,” chief executive Anders Opedal said in a statement.

“Solid operational performance and high production combined with high prices resulted in strong financial results,” he said.

READ ALSO: What does Norway do with its oil money?

Norway is Europe’s second-biggest supplier of natural gas behind Russia.

Equinor will pay out a cash dividend of 70 cents per share in the second and third quarters – divided into 20 cents in an ordinary dividend and 50 cents in an extraordinary dividend.

The result comes close to matching the record 18-billion-dollar operating profit it announced in the first quarter of this year. 

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ECONOMY

Which rising costs are consumers in Norway most concerned about?

It feels as if everything in Norway is fast becoming much more expensive than it already was. New figures have revealed which price increases Norwegian households are most worried about.

Which rising costs are consumers in Norway most concerned about?

In Norway, the cost of living is rising across the board. In August, inflation was measured at 6.5 percent, compared to the same month a year before, figures from national data agency Statistics Norway show.

Additionally, households have been warned on numerous occasions by experts and analysts to prepare for a winter of sky-high energy prices. 

And on Thursday, Norway’s central bank, Norges Bank, announced it was raising the key interest rate by 0.5 percentage points, meaning loan and remortgage repayments will become even more expensive in due course. 

So, which rising cost has consumers across Norway most concerned about? High energy bills have consumers in Norway most worried, according to a survey by Sparebank 1. Norwegian newswire NTB reports that 54 percent of those who responded to the survey are concerned by high electricity prices. 

Analysts in Norway have warned that prices in southern Norway could rise as high as 20 kroner per kWh this winter due to low-reservoir filling levels, the war in Ukraine and soaring gas prices. 

Norway relies on hydro-power to meet its energy needs. However, reservoir filling levels in parts of Norway remain at 20 year lows.

However, the high prices are only felt in south-east and south-west Norway. In north and central Norway, prices are much lower than in the south as reservoirs are fuller and hydroelectric dams typically make more power than these parts of the country need. 

Unfortunately, for those carrying the burden of high energy bills in the south, power from the north is not easily transferred. Typically it needs to be exported to Sweden first and then re-imported. 

After energy prices, the cost of food was the next biggest worry for Norwegian households, according to the bank’s survey results. Some 46 percent of those who answered the survey said food bills were concerning. 

The Scandinavian country is one of the most expensive countries in Europe for food shopping, according to Eurostat, which monitors price levels across the EU, EEA and EU candidate countries. 

Unfortunately, grocery bills in Norway have risen by 10.3 percent over the past year, according to Statistics Norway

As a result, people in Norway are tightening their purse strings and trying to save a few kroner where possible. This is evidenced by the use of the surplus food app Too Good to Go seeing record use last month.

In August, around 245,000 bags of surplus food or groceries were sold via the app- a record for the app. The app allows users to buy surplus food from shops and eateries that would have been thrown away.

READ MORE: Six apps to help you save money on your food shopping in Norway

And finally, 41 percent said that increased interest rates were an issue. Earlier this week, the key interest rate was raised by 0.5 percentage points. 

Norges Bank has said it sees increased interest rates as a tonic to curb inflation. However, this comes with the caveat of higher loan and mortgage repayments. 

For every 0.5 percentage points your loan or mortgage interest increases, your annual interest costs will increase by 5,000 kroner for every million you owe.

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