Opposition parties said that the Government was failing to act as oil companies continue to rake in massive profits even though oil and gas prices have come down from last year’s highs.

BP on Tuesday reported that it had made around 2.59 billion US dollars (£2 billion) in underlying replacement cost profit over the three months to the end of June.

Despite it being more than two-thirds lower than last year’s results, it sparked further criticism of how the Government has handled an industry which has benefited significantly from Vladimir Putin’s full-scale war on Ukraine and the spike in world energy prices that followed.

“These figures demonstrate the continuing scandal of the Tory failure to act on the windfalls of war being pocketed by the oil and gas producers,” said Labour’s shadow climate and net zero secretary Ed Miliband.

He added that Prime Minister Rishi Sunak “should start by fixing the gaping loopholes in the windfall tax on oil and gas profits, not handing them out billions of taxpayer subsidy.

“Labour would bring in a proper windfall tax on oil and gas giants to help tackle the cost-of-living crisis, alongside our plan to make Britain a clean energy superpower so we can lower bills for families and businesses.”

The Government has put a windfall tax on the profits that oil and gas companies make from the North Sea. However, it has included the ability to reduce the tax if the companies invest, something the opposition has called a “loophole”.

A year ago BP made an 8.45 billion dollar (£6.6 billion) profit, when it was boosted by a surge in oil and gas prices.

BP blamed the decline in profits on planned maintenance work and lower margins in its refining business.

The industry has also faced a gradual reduction in the price of fossil fuels, especially natural gas.

No family should go cold next winter because the Government backed down on taxing the likes of BP.

Natural gas was trading at around 320p per therm a year ago, now it is worth around 70p per therm.

Yet it still revealed plans to hand more cash to investors through higher dividends and a further share buyback.

It comes a week after rival oil major Shell also delivered weaker-than-expected profits for its latest quarter.

BP said the performance takes its total profits for the first half of 2023 to 7.5 billion dollars (£5.9 billion).

The company added that its North Sea business paid 970 million dollars (£755 million) in tax over the half-year, with 460 million dollars (£358 million) due to the energy profit levy windfall tax.

The update comes a day after Prime Minister Rishi Sunak insisted he wants to “max out” developments in the North Sea and claimed Labour’s refusal to support new oil and gas fields would be “bad for the British economy”.

Liberal Democrat Treasury spokesperson Sarah Olney said: “These monster profits will be another nasty shock to families who couldn’t afford to heat their homes this year.

“The Government shouldn’t be hoodwinked to remove the windfall tax by this profit drop. Let’s be frank, these are still huge.

“No family should go cold next winter because the Government backed down on taxing the likes of BP.

“It is time to put the needs of struggling families and pensioners over the wallets of global oil firms. Yet this Conservative Government is completely out of touch and has its priorities all wrong.”

BP chief executive Bernard Looney said: “Another quarter of performing while transforming.

“Our underlying performance was resilient with good cash delivery during a period of significant turnaround activity and weaker margins in our refining business.

“We’re delivering our strategy at pace – we’ve started up two major oil and gas projects to help keep energy flowing today and we’re accelerating our transformation through our five transition growth engines.

“And we’re delivering for shareholders, growing our dividend and announcing a further share buyback.”

Shares in BP were up around 2% at around midday on Tuesday.