Pass on price cuts, PM demands

The Prime Minister warned oil companies that he and the public expected to see them follow two supermarkets by translating tumbling world prices into cheaper petrol for motorists.

And energy minister Mike O'Brien said suppliers should promise customers cheaper power to reassure them at a time of tight domestic budgets and help stimulate the wider economy.

Oil prices fell below 70 dollars a barrel at one point on Thursday on concerns over weakening demand - about half the high mark hit over the summer. But Mr Brown, who was in Brussels for an EU summit dominated by the global credit crunch, said the cheaper cost was not being passed on to all consumers.

"We will be monitoring what is happening and I expect other companies to follow the path being taken by two supermarkets," he said. "People know that when oil prices go up that is reflected very quickly in the petrol pump price. And they want to know that when it goes down it is also reflected in the price."

Asda and Morrisons announced they were reducing the price of unleaded to 99.9p a litre on Wednesday - the first time since December that the level has fallen below £1.

The Government stepped up pressure on the power companies to cut gas and electricity bills in the wake of a fall in oil prices.

Mr O'Brien acknowledged there was a "lag" of about six months in seeing prices come down, as the power companies bought supplies ahead.

"But we have said at a meeting with the gas companies yesterday that we want to see them give some indication, as soon as they are able to, about what they are going to do from the fact that we've seen the gas wholesale prices start to move in a better direction," he told MPs.

"If there are benefits we want to see them feed through not just to individuals who have to pay the bills, but to the economy as a whole, to give it a boost," he added.