Oil and gas contribute hundreds of billions of euros to European government revenues every year, a new study shows, highlighting how the industry – far from being subsidised – crucially boosts public finances in the European Union and Norway.

Energy taxation and subsidies in Europe, a study commissioned by the International Association of Oil & Gas Producers (OGP) and carried out by independent consultant NERA Economic Consulting, sheds new light on the financial contributions and subsidies in the European energy sector.

“Far from being subsidised, the oil and gas industry is among the largest contributors to government revenues in the energy sector,” explained Roland Festor, OGP’s EU affairs director.

OGP has commissioned the research in a bid to show the facts about European government subsidies to energy industries, as the issue is intensely debated, with conflicting numbers and complicated methodologies.

“Reliable figures are crucial now, as the European Union looks at state aid, energy costs and consumer protection policies in a bid to protect household bills, preserve industrial competitiveness and ultimately define Europe’s long-term climate and energy policy,” said Mr. Festor.

The consumption of one barrel of oil generates $124 (around €90) in government revenue. This contrasts with the consumption of an equivalent amount of energy generated by renewables, which in some cases can cost tax payers over $700 (or more than €500), the study shows.

Oil and gas contributed €433 billion to the EU and Norwegian government treasuries in the reference year 2011 (the latest year for which comprehensive data was available) and received €0.6 billion, making it a net contribution of €432 billion. These numbers are in contrast to the prevailing assertion that oil and gas received billions of euros in subsidies across the EU in 2011.

About OGP

OGP represents most of the world’s leading publicly-traded, private and state-owned oil & gas companies, oil & gas associations and major upstream service companies. Our members produce more than half the world’s oil, about one third of its gas and account for trillions of USD in revenue.

OGP represents the upstream oil and gas industry before international regulators and legislators. Our Brussels office is the voice of the industry in its interaction with the European Union.

Our head office in London represents the industry in such UN bodies as the International Maritime Organization and the Commission for Sustainable Development. OGP also works with the World Bank and with the International Organization for Standardization (ISO) and is accredited to a range of regional bodies. These include OSPAR, the Helsinki Commission and the Barcelona Convention.

We also help members achieve continuous improvements in safety, health and environmental performance and in the engineering and operation of upstream ventures. OGP’s extensive international membership brings with it a wealth of know-how, data and experience.