After months of mounting pressure from MPs and public bodies, then-Chancellor Rishi Sunak announced in May that millions of households would receive a £400 discount on their energy bills paid for by a £5bn tax on oil and gas giants.

But Offshore Energies UK (OEUK), which represents the sector in the UK, said it was concerned that the Energy Profits Levy (EPL) would dampen investment. This is despite the fact that fossil fuel firms have announced record profits in recent weeks, with BP reporting its biggest quarterly profit for 14 years earlier this month.

“Introducing a new tax so suddenly, and with relatively little consultation, risks destabilising investor confidence,” the body said.

“OEUK has warned that anything which risks reducing UK oil and gas production at this time will further increase reliance on imported energy while also undermining the ability of these companies to reinvest in cleaner energies.”

The EPL is predicted to raise £5bn in its...