delete The Energy (Oil and Gas) Profits Levy (Energy Security Investment Mechanism) Regulations 2024
These Regulations specify the methodology for calculating the average oil price (using World Bank Brent Crude data in USD/barrel) and average gas price (using ICIS National Balancing Point data in GBp/therm, converted to £/therm) for determining thresholds under the Energy (Oil and Gas) Profits Levy Act 2022. They provide formulas, data sources, and rounding rules for section 17A(1) of the 2022 Act.
This regulation implements a windfall profits levy that distorts investment incentives in the energy sector by taxing successful producers during high-price periods, discouraging domestic investment when it is most needed. The elaborate calculation mechanism adds compliance complexity and creates regulatory uncertainty for investors making long-term capital decisions in oil and gas production. Such levies represent exactly the kind of intervention Adam Smith warned against: punishing enterprise and capital formation, picking winners through fiscal policy, and undermining the price mechanism that coordinates resource allocation efficiently.