Robert Halfon is the Member of Parliament for Harlow. Follow Rob on Twitter.
Today in Parliament, I will lead a debate in Parliament, urging the Office of Fair Trading and the Financial Services Authority to investigate the oil market. This is for three reasons:
- Petrol and diesel have never been more expensive, despite a two-year freeze in fuel duty.
- Oil companies – we have proof – are stopping cheaper oil prices from getting to market. This hurts people on low incomes, who are filling up the family car.
- A professional oil trader has now given an explosive statement to my PetrolPromise.com website, explaining in detail how the oil-price is being rigged by speculators and banks.
Other G20 nations are restoring competitiveness. Germany and Austria are cracking down on oil profiteers, and their Federal Cartel Office has started a criminal investigation. America is bringing in tougher penalties – including jail-time – for “market manipulation”. But agencies in Britain have been very slow to respond.
Now I want to see lower fuel taxes, too. I have always campaigned in Parliament – with the Sun, Times, Mail, Express, Telegraph, FairFuelUK, and others – for a cut in fuel duty. In the future, I will always urge the Government to reduce fuel duty if they can.
But as Conservatives, we should believe in good business, not big business. If cartels and crony corporates are pushing up the cost of living, we should oppose them just as strongly as we oppose Labour’s vision of a centralised “Big State”.
There are many reasons to care about high fuel prices, which I have set out on ConservativeHome before. For example, the cost of petrol is regressive – it hits the poorest Brits twice as hard as the richest. High petrol and diesel prices are also crushing our economic recovery. In 2011, Sir Terry Leahy of Tesco blamed the catastrophic slump in retail sales on the cost of fuel. He told The Sun:
“I don't think people fully appreciated what an oil shock we've had. Filling up the family car has gone up 70% in two years, causing what was a steady recovery to go sideways.”
Finally, the AA state that 3p more at the pumps – every single day – wipes off £1.8 million spending from the high street. So we should be clear even small differences in the oil price are vitally important. But to be clear, the victims are not just families on low incomes. Smaller forecourts are also being crushed by anti-competitive behaviour. More than 300 are now being forced into bankruptcy every year.
For the doubters out there, I recommend three things. First read the PetrolPromise.com dossier, which sets out all the evidence in detail. Second, drive to any independent petrol forecourt in the country, and ask them what THEY think of the oil wholesalers. Third, on the allegations about price-fixing and market manipulation, read the Rowena Mason article in the Daily Telegraph, about how oil price “benchmarks” could be easily rigged – like LIBOR. Similar concerns have been raised by the Consumer Federation of America, Bloomberg, Deutsche Bank, professors at MIT, Maryland University, and the LSE.
We need an oil market that is competitive; that passes on cheaper prices to consumers; and that cannot be rigged by hedge funds and financial gamblers. I hope very much that this is what Parliament will vote for today.