Concerns over the excessive profits made by oil companies were reignited today when Shell, the Anglo-Dutch giant, revealed a 9 per cent leap in full year profits to a new record of $27.6 billion (£13.9 bn).

The world's second biggest quoted oil company said that fourth quarter income climbed 60 per cent, during a period when the oil price soared to $100 a barrel and prices at the petrol pump climbed to more than a £1 a litre.

Union leaders called the results "obscene" at a time when pensioners, motorists and industry were struggling to pay higher energy prices.

Tony Woodley, the General Secretary of Unite, demanded that the Government levy a windfall tax on the oil majors.

However, Jeroen van der Veer, the chief executive of Royal Dutch Shell, called the profits, which beat City expectations, "satisfactory" as production levels fell for the fifth consecutive year. Responding to Mr Woodley's attack Mr van der Veer said that in the UK taxes accounted for more than half the cost of petrol at the pumps. "We have no influence over that," he said.

Any windfall tax on the industry would merely lead to lower investment levels and eventually lower production levels, Mr van der Veer said, pointing out that in 2007 Shell invested $33 billion into its upstream activities — more than its entire full year profits.

He said: "We made good progress in 2007, launched new projects upstream and downstream, and achieved exploration successes." However, Mr van der Veer said that the industry environment was becoming increasingly difficult with costs soaring and state-owned oil companies becoming stronger and more international, particularly in the upstream business.

Record oil prices offset the impact of lower oil production and higher downstream costs and taxes. The company also gave warning that it continued to see weak refining margins in the fourth quarter, particularly in the US Gulf Coast and US West Coast.

Shell has achieved lower refining margins than the industry average due to unplanned downtime in some of its refineries.

Oil and gas production, including oil sands production fell by 209 barrels per day in the fourth quarter to 3,436 thousand barrels per day. Full year 2007 production was 3,315 thousand barrels per day, down from 3,473 thousand barrels per day in 2006.

While underlying volumes for the full year, stripping out the impact of divestments, contractual settlements and price impacts from production sharing, fell by 2 per cent.

Production in 2008 is likely to be lower again, the company confirmed, despite having invested $79 billion in new assets over the last four years.

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