Energy: Oil Price Projections

Lord Hamilton of Epsom Excerpts

Monday 28th January 2013 Lords Chamber

[Baroness Verma]

My Lords, these reports appeared widely in the media over the weekend. I accept from the noble Lord that they are worrying, particularly in times of hardship for most consumers. Perhaps we should look—I was going to say at how we make it easier for consumers not to be ripped off at the petrol pump, but I shall not—at how we can encourage retailers to pass down a drop in price if it comes through the crude oil route. However, the Office of Fair Trading is looking at retail pricing and at how reductions in price are passed down. We hope to be able to respond once we have viewed the report.

[Lord Hamilton of Epsom]

My Lords, about 12 months ago, Shell produced a forecast for oil prices which was between $70 and $90 a barrel. That has not proved right and prices now are between $115 and $120. If Shell cannot get its forecast right, are the Government likely to?

[Baroness Verma]

My Lords, I thank my noble friend for that very helpful question. Of course, we do not always dictate the global scenarios that often change in front of us. While we try to make our predictions as accurate as we possibly can, scenarios will be played out on the international scene over which we have no control. Therefore, our scenarios are based on price structures that take into account the low, the central and the high. The price forecasts that we have come to were made on that basis.