Norway Registers Record-High Tax Revenues From Oil and Gas in 2021 Amid Sky-High Energy Prices
One of Western Europe's largest energy producers, Norway has long been benefiting from its oil and gas wealth, which has produced the world's largest sovereign wealth fund, with a current value of $1.38 trillion.
In 2021, Norway registered a record-high tax revenue from oil and gas of NOK 295 billion ($33 billion) amid a hike in energy prices, the country's tax authorities reported.
“The large increase can especially be attributed to the very high gas prices in the second half of 2021. The petroleum tax has never before been as high as it now seems to be,” tax director Nina Schanke Funnemark noted in a press release.
According to the Norwegian Tax Administration, the previous record was set back in 2008 at NOK 247 billion (nearly $28 billion) amid ballooning oil prices.
This autumn and winter, the price of gas across Europe has been the highest ever, peaking at the equivalent of $350 per barrel when compared with oil prices. By contrast, the highest oil price ever was close to $150 per barrel in 2008.
The record-high tax revenues coincide with a spike in export revenues following a nosedive. Statistics Norway released figures showing that Norway's export revenues from oil and gas in 2021 amounted to NOK 825 billion ($92 billion), up from merely NOK 326 billion ($36 billion) the year before.
Furthermore, the gains were accompanied by the country's Petroleum Fund, where the surplus oil and gas revenues are stored, earning a return on investment of NOK 1,580 billion ($177 billion) in 2021. According to the finance news outlet E24, the return is the second-highest ever, surpassed only by the 2019 ROI.
“The good result is primarily due to a very strong development in the stock market throughout the year. There was a positive return in all sectors, but especially the investments in technology and finance have done well”, the Petroleum Fund’s manager Nicolai Tangen said in a press release.
The biggest individual contributors to the fund’s returns were Microsoft, Alphabet and Apple.
Norway is one of the world's leaders in exports of energy resources, covering about 2 percent of global oil demand and 3 percent of the natural gas demand. The oil and gas revenues have been the foundation for the Petroleum Fund, the world's largest sovereign wealth fund, which currently has a value of $1.38 trillion.
However, despite the obvious successes, in recent years, many left-wing parties, numerous journalists and opinion-makers, and even the Church of Norway have advocated for a halt to the country's oil exploration for environmental reasons.
26 November 2021, 06:44 GMT