Fuel Prices

Iain McKenzie Excerpts

Thursday 13th September 2012 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

I congratulate the hon. Member for Harlow (Robert Halfon) on securing this important debate. Many of my constituents have contacted me on the subject of fuel prices over the past few months, and they are extremely concerned, because there is no doubt that high fuel prices are hitting them hard at a time when their families are being squeezed by higher food, gas and electricity prices.

In fact the situation is even worse in my constituency, because one large retail outlet has a near-monopoly, which means that petrol can cost drivers in my area an average of between 3p and 5p a litre more than it does people in our neighbouring constituencies. That is tending to drive business and customers out of Inverclyde and into neighbouring areas in search of cheaper fuel to fill up their tanks.

Bizarrely, that large retail outlet, Tesco, tells my constituents that if they spend between £80 and £100 in the store they will receive a voucher giving them between 3p and 5p off a litre of petrol. How generous of it, and how astute at the same time—it is winning both ways. How is it that someone can shop in the store and get 5p off at the pump, but not pull into the petrol station and receive the same price? It makes me wonder at what price Tesco is receiving its petrol. We have to examine the whole supply chain by which fuel reaches our pumps, because at each step of the way people are making large profits.

Inverclyde could not be described as a rural constituency, but as far as such retailers are concerned we are a captive constituency. When the oil prices go up we see an almost instant increase at the pumps, but when oil prices go down it seems to take for ever for the price to get lower, if it does at all. Along with my constituents, I therefore welcome the debate so that we can hold the fuel retailers to account and have them justify not only the high price of fuel but their sluggish reductions to fuel prices.

I must point out that it is not only the big, bad oil companies and fuel retailers that are hiking up the price of petrol. The Government are also adding to the cost. They hiked up VAT to 20% and applied it to fuel, and we know that high fuel tax hits the poorest in our society who need their cars the most, either to get to work or to visit people. It is not big businesses but hard-working families who pay that money, and those families are finding it increasingly expensive to fill up their cars. High fuel prices are having a devastating effect on my community, and a cut in fuel duty would stimulate growth and create jobs.

Only the other day I was told that a staggering 30% of lorries carrying goods from Scotland to the south-east are from outside the UK, and so have the privilege of being able to fill up with cheap diesel and petrol from the continent. If the Government are really serious about making an instant impact at the pumps, they should take the first step and cut VAT on fuel.