Motoring Fuel Costs

Debate between Robert Halfon and Russell Brown

Tuesday 14th June 2011 Westminster Hall

[Robert Halfon]

I do not want to unveil all my secrets at once, and if the hon. Lady waits a bit, I will give her my proposal.

Total’s profit rose 34% year on year, and ExxonMobil saw a 69% profit jump to $10.5 billion. We must acknowledge that some companies make a good return for pension funds, but a balance must be struck. I remember the fuel protests in 2000, when we were seriously concerned about the threat of petrol at 80p a litre. According to PetrolPrices.com, the excellent price comparison website, the most expensive unleaded fuel in the UK is now £1.51 a litre.

I accept that 64% of the petrol price is taxation, and I welcome the Chancellor’s steps to slash some of the planned taxes, but the big oil companies must play their part. Why are prices so different at petrol stations, and why are they raking in such astronomical profits when small businesses are being forced into bankruptcy by fuel costs?

[Mr Russell Brown (Dumfries and Galloway) (Lab)]

The hon. Gentleman rightly mentioned the oil companies. Did he witness the same thing as I did in my constituency eight or 10 weeks ago when some of the major supermarkets embarked on a price reduction of 5p a litre if customers spent a specific amount on goods, and at the same time raised the price of fuel by 4p or 5p a litre, which in turn forced the independents to put up their prices? The situation was contrived by some supermarkets.

[Robert Halfon]

The hon. Gentleman makes an important point, and that is why I am arguing for transparency. If supermarkets reduce prices, they must do so properly. We cannot have situations such as the one he describes. We often bash bankers, but oil barons are far worse, because they enjoy a semi-monopoly in the UK market, and most motorists have no alternative but to buy their products. We need transparency above all. Oil prices are falling, and we must ensure that the big companies cut their prices at the pump.

The green movement makes a case for expensive petrol, but modern vehicles have lower carbon emissions. Cars account for only 13% of our man-made carbon emissions. My argument—some hon. Members may say that it is controversial—is that environmentalism sometimes becomes a luxury for the rich, with no substantive answers, other than regressive taxes on energy. It is all too easy, in the cause of saving the planet, for the wealthy to insist that the poorest families should pay more in petrol taxes, and gas and electricity bills.

The impact of high fuel prices is particularly severe on road freight companies, and they are a major employer in Harlow. Road freight carries nearly 97% of everything we eat, wear or build with. High and rising fuel costs force the road freight companies to try to pass on the extra cost, and that stokes inflation. If they fail to pass on the increased costs, they go bust.

The road freight companies face a further cruel impact that the UK green lobby must consider. Fuel duty levels on the continent are about 24p a litre lower than in the UK, so hundreds of thousands of foreign lorries pour into the south-east of the UK and undercut UK hauliers. Foreign trucks pay no road tax here, and I welcome the Government’s plans to introduce a £9 a day charge, although I believe that it should be a lot higher. Those trucks pay no fuel tax in the UK as their tanks are big enough to last all week and all their fuel is bought abroad. They pay no employment taxes. They simply come into the UK, drive our UK freight companies out of business, and pay nothing to the Exchequer.