In his speech to the annual conference of the Confederation of British Industry on Monday, the Prime Minister defended the Autumn Declaration and insisted that the budget had restored confidence and stability.

He acknowledged there was “more we need to do”, but said the government’s move to protect research and development spending would boost innovation, calling on companies to increase investment too.

However, speaking at the same event, Mr Bunch warned that the expansion of the windfall tax threatened to ‘chill’ investment in the North Sea and that Shell itself was now reconsidering a series of projects in result.

He said: “It brings a strong headwind. When we looked at the long-term investment plan and the probability of projects, we assumed some kind of tax calculation and it changed – so you have to start all over again.

“To that extent, projects that have already come out, some will be impacted. I don’t expect any of those currently in production to be downgraded.

“In terms of future projects, you will have to re-examine the economics and take a project-by-project view.”

Shell announced plans to invest between £20bn and £25bn in UK energy projects in March, with more than three-quarters of the money to be spent on green energy schemes.

Asked if the windfall tax increase had put those plans in doubt, Mr Bunch said: ‘Yes. We cannot take it for granted that the full £25bn will be invested.

He said the tax should also be in place for too long and should be removed before 2028 if oil and gas prices drop significantly. Shell is pressuring the Treasury for changes.

A Whitehall source, however, rejected calls for an overhaul on Monday, insisting the levy would be included as proposed in legislation due to be tabled in Parliament next week.

But it came as oil prices fell to their lowest level since before the war in Ukraine after Saudi Arabia and other OPEC nations reportedly discussed increasing production, while China tightens Covid restrictions, reducing expected demand.

The report was denied by Saudi Arabia, but it caused the price of Brent crude to fall below $83 a barrel for the first time since January.

Industry sources have suggested that if oil prices fall below $80 a barrel, it will make investments less viable.

Despite the drop, however, the RAC accused supermarkets of failing to pass on price savings to motorists in the forecourts of service stations, charging “much higher prices than they should be”.

He said supermarket profit margins are around 15p per liter for petrol and diesel, meaning customers are charged an ‘unnecessarily high’ average price of 161p per liter for petrol and 184.4 pence for diesel.

This is just 2p per liter less than the average for all UK forecourts, while supermarkets have historically charged around 3.5p per liter less than the UK average.

Simon Williams, the RAC’s fuel spokesman, said: “This is unfortunately a perfect example of prices falling like a feather, as opposed to them skyrocketing as soon as the wholesale price rises significantly. .”

A spokesman for the UK Treasury said: “The energy profit levy strikes a balance between funding cost of living support while encouraging investment to enhance UK energy security.

“We have made it clear that we want to encourage the reinvestment of profits from the sector to support the economy, jobs and our energy security, which is why the more a company invests in the UK, the less tax it will pay.”