BP Gulf oil spill may cost US taxpayer almost $10bn

BP has said it plans to offset the entire cost of its Gulf oil spill against its tax bill, reducing future contributions to US tax coffers by almost $10bn.

BP took a pre-tax provision of $32.2bn in its accounts for the period, for the cost of capping the well, cleaning up the spill, compensating victims and paying government fines.

However, the net impact on BP’s bottom line will only be $22bn, with BP recording a $10bn tax credit, most of which will be borne by the US taxpayer, a spokesman said.

Analysts said BP could prompt more public and political anger in the US by deducting all the costs, and especially the expected fines BP will face.

BP’s UK tax bill will also be reduced, BP added, meaning that the UK government will also lose out. Both the US and UK governments receive hundreds of millions of dollars from the company in tax payments each year.

It will be little comfort to BP that, without the costs of the Gulf oil spill clean-up, its profits for the three months to June 2010 would have almost doubled to £3.22bn, thanks mainly to higher oil prices.

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BP Gulf oil spill may cost US taxpayer almost $10bn