Charlie Elphicke is MP for Dover and Deal.
A month ago, the price of oil rose, sterling went down and forecourt pump prices rocketed. Drivers watched with rising alarm as the dials whizzed round ever faster. Since then, the price of oil has fallen and sterling has gone up. Yet pump prices have stuck fast at 117p a litre. This is yet another example of how pump prices jump like a rocket, yet fall like a feather. Only when tackled in the media by campaigners did pump prices start to fall.
This is why more than 50 Conservative MPs have come together to make a joint call for the Government to take action. There needs to be a fairer deal for drivers at the pumps. For too long, greedy big oil companies have been making the fuel market work for them. It needs to work for drivers – with a fair deal at the pumps, a transparent market and predatory pricing behaviours tackled.
The FairFuelUK group of MPs is campaigning for change. The Government has done a lot – freezing duty since 2011. Now we need to see big oil companies do their bit to act fairly to drivers, businesses and the hard working classes of modern Britain.
A fair deal on fuel prices
There is now a powerful case for the setting-up of a new, independent watchdog to police predatory pricing at the pump. We have OfCom to watch the broadcasters and OfGem to turn up the heat on energy companies. So why don’t we do more to tackle profiteering at the pump by oil companies and wholesalers?
Since the EU referendum, it’s clear to see how drivers have been taken for a ride. Research by FairFuelUK shows that in August, following the referendum, wholesale fuel prices fell by five per cent, but pump prices didn’t move. Then in late September and early October, wholesale prices rose by five per cent and pump prices immediately jumped. Most recently, the wholesale price of fuel fell by 4p between October 10th and November 10th. But forecourt prices just kept going up. Profits for the oil companies rocketed by some 250 per cent.
So it’s clear to see why pricing transparency is such a grave concern to drivers. People feel deeply that prices rise swiftly and fall slowly as oil prices fluctuate – because that is exactly what happens. That’s why so many fellow Conservative MPs joined the call for the Government to set up PumpWatch, and why we have handed in a petition signed by more than 20,000 concerned drivers calling for this powerful and independent watchdog to be set up. Every driver in Britain has a right to know who’s pocketing their hard-earned cash.
Cut duty to drive growth
The fuel duty freeze since 2011 has been of huge benefit to drivers, saving them £126 a year compared with Labour’s fuel escalator plans. This makes such a difference, since transport is the second largest cost for most families. The freeze has boosted the economy without losing revenue – as the total collected through income tax has risen.
A report by the Centre for Economics and Business Research, commissioned by the FairFuelUK campaign, shows that keeping the freeze up to May 2020 would save UK households £135 a year on average. The poorest 50 per cent of households in Britain would have a total £2.2 billion more to spend. So the freeze has helped working people, boosted the economy – but not lost the Treasury any cash. This is why it is so important to keep fuel duty down.
Yet cutting duty further could be an even greater boost to the economy and we hope the Chancellor will consider the case for it in the Autumn Statement and the coming months leading up to next year’s Budget. For if we were to go even further and make a cut of 3p in fuel duty, the CEBR’s research shows it would create 8,000 more jobs. It would save the poorest 50 per cent of households an extra £1.9 billion. The average household would benefit by £116. A 1p rise in fuel duty would mean families were £106 million worse off. The benefits of keeping fuel duty down are clear – so too are the even greater benefits to be had from cutting it further.
A bold move for a Brexit Britain
We must build a Brexit Britain that works for every family, every small firm and every driver. A Britain that works for everyone must include a fair deal on fuel prices.
We’ve seen pump prices start to fall following public pressure. Yet it would be far better to have an open, transparent and genuinely competitive market. That’s why PumpWatch is needed to make sure drivers get a fair deal at the pumps all year round.
The fuel duty freeze has been a real boost to the UK economy. But it’s clear that a cut would be an even bigger boost to hard-working families and small businesses. It would be a bold move – but one that would help everyone.
The hard working classes of modern Britain want to live in a country that works for everyone. Let’s start driving Brexit Britain forward by giving every driver a fairer deal on the forecourt.