Fuel Prices

Debate between Jim Shannon and Amber Rudd

Wednesday 21st January 2015 Westminster Hall

[The Parliamentary Under-Secretary of State for Energy and Climate Change (Amber Rudd)]

It is a pleasure to serve under your chairmanship, Sir Roger. This has been a very interesting topic to debate. It has attracted a lot of attention, and I hope I can answer most of the questions that the hon. Member for Inverclyde (Mr McKenzie) asked.

Let me begin by saying that the evidence is that at a national level the UK fuel sector represents a very competitive market. It is as a direct result of that competition that we see the fall in crude oil prices being passed on to consumers at the pumps and in their homes. The hon. Gentleman particularly wanted to address the issue of whether competition is working nationally and in his constituency, so I will comment on the role and what I believe is the success of competition in the road fuel market.

The downstream fuel market served by UK petrol stations and forecourts is a market in which competitive forces should operate to deliver a fair deal for customers. It is subject to UK competition law, and the Government do not have a direct role in setting the price of petroleum products in an open and competitive market. As the hon. Gentleman said, in January 2013, the Office of Fair Trading published the results of its call for information, which found no evidence that oil price rises are passed on to motorists more quickly than oil price falls; that issue was also mentioned by the hon. Member for Strangford (Jim Shannon). The OFT national analysis suggests that the so-called “rocket and feather impact”, whereby prices rise like a rocket and fall like a feather,

“does not appear to be a significant feature of the road fuel sector in the UK.”

The OFT report continued:

“Our estimates of the speed at which upstream price changes were passed down the supply chain when upstream prices rose was not found to be statistically significantly different from the speed of pass-through when upstream prices fell indicating that this pass-through is, on average, symmetric, both for diesel and petrol.”

As we have discussed, movements in pump prices are driven by crude oil prices, and analysis by the Department of Energy and Climate Change suggests that, once crude price changes are converted into sterling, they are fully passed through into pumps within six to seven weeks, which largely represents the time required to refine crude oil into petrol and diesel, and to distribute petrol and diesel. Although we have already seen some price falls, I am hopeful that we may see more in the future, after the time lag of six to seven weeks.

[Jim Shannon]

I have not seen that in my constituency. What my constituents have seen is an increase within 24 hours every time oil goes up in price, but certainly not the equivalent downturn when oil prices fall. May I respectfully make a suggestion to the Minister? I am not saying that it is always the case, but in some cases the petrol tanks were full of fuel that was bought before the price increase, and I suggest that that practice would result in exorbitant profits for the person concerned.

[Amber Rudd]

It is interesting to hear the hon. Gentleman’s views and his account of the experience in his constituency. In fact, as I say, it has been six to seven weeks since the oil price fell, so I would be very surprised if he did not start to see that fall reflected in the forecourt price in his constituency. Perhaps he would keep me posted, because the Government are committed to making sure that that happens.

Common Fisheries Policy

Debate between Jim Shannon and Amber Rudd

Thursday 15th March 2012 Commons Chamber

[Amber Rudd (Hastings and Rye) (Con)]

It is a pleasure to follow the hon. Member for Great Grimsby (Austin Mitchell) and to hear his support for our report.

The common fisheries policy is friendless—I think we will hear more about that from hon. Members this afternoon. However, it is not just we who say that: it is the fishermen, the environmentalists, to whom it has not been the solution they expected, and—let us face it—now the population at large, to whose attention the issue of discards has been brought. Discards are the very manifestation of the failure of the CFP. However, we have to be careful, as my hon. Friend the Member for Thirsk and Malton (Miss McIntosh) said in opening the debate, to ensure that we do not wish for the end of discards without explaining how to get there. We all want to see the end of discards, but the current system, with the mixed quota and a mixed fishery, does not allow for it. We therefore have to proceed in a measured, step-by-step way that will allow for what we all ultimately want: the end of discards.

I cannot overstate the mess and confusion that the industry faces. If Mephistopheles himself had tried to design a system intended to confuse and inhibit people, and to get the worst possible outcome for all the stakeholders, he just might have come up with the current system.

[Jim Shannon]

Just to step back to the issue of discards for one second, the hon. Lady will be aware of the progressive steps that local fishing organisations have taken to try to address it—through net sizes and so on. Does she feel that those steps—put forward by fishing organisations and coming straight from the industry itself—should be taken on board as a way of addressing the issue of discards directly?