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Brown orders fuel price cut
Joe Murphy, Political Editor16.10.08
Petrol companies faced calls today for an immediate and deep cut in pump prices.
Gordon Brown threatened garage owners with an inquiry unless they passed on the fall in global oil prices to the consumer.
The move came after two supermarkets led the way by cutting the price of a litre to just below one pound.
On the international market the price of oil slumped again today with a barrel of Brent crude down $2.37 to $68.43.
The last time the oil price was at that level, in June, petrol cost 97p a litre, but today the AA said it was selling for an average of 106.4p.
The Prime Minister said: "We have got two supermarkets that have reduced their prices below £1 a litre. We want to see the competition between supermarkets and oil companies reflected in lower prices at the pumps."
Mr Brown said while the price of a barrel of oil had come down from a peak of $150 it had not been reflected yet on the garage forecourts. He added that while the average UK price was £1.07 a litre, some areas were seeing "unacceptable" variations of up to £1.20.
He said: "Over the next few days we will be monitoring what is happening. But I expect other companies to follow the path that has been taken by the two supermarkets in the past few days. We have had reports done before on what has happened in the marketplace and we will continue to look at these things."
Motoring organisations echoed Mr Brown's demands for immediate cuts. Sheila Rainger, the RAC Foundation's head of campaigns, said: "When oil prices go up, retailers do not hold back from passing the price increase onto the motorist.
"That ought to be a two-way street. Sadly they are much quicker to put prices up than bring them down again.
"The supermarket price war that we have seen this week is helpful but unfortunately only for those motorists near enough to a supermarket to take advantage of it." Although the oil majors have moved to match Asda and Morrison at some nearby garages, the national average price is higher.
A Shell spokeswoman said: "We always try to remain competitively priced. At some company-owned sites we are 99.9 pence a litre. On average, Shell offers the cheapest fuel in the UK among the oil majors."
A spokesman for BP said: "We aim to pass price decreases on as soon as we can, but there is often a lag. Our prices have dropped significantly since July."
David Moore at Commonwealth Bank of Australia, said: "The market is just very worried about a severe international economic downturn. They're thinking that oil consumption will be weaker than expected."
Damien Cox, senior analyst at energy adviser John Hall Associates, predicted further falls as the outlook for the worsening economies becomes clearer over the coming months.
He said: "With the economic situation looking the way it is, I don't think we have seen the bottom yet. There's still a little bit to come out of this over the next few months."
AA president Edmund King said the Asda and Morrisons announcements "represents a full-blooded phase in the petrol price war between supermarkets".
He went on: "These savings give driver and family budgets a very welcome boost when other bills are exerting severe pressure. They should also boost the economy by giving millions of motorists more spending power.
"However, the Government should not take these price reductions as an excuse to hike up fuel duty."
Reader views (29)
He needs pump prices lower so that he can increase tax levels to fund the bank bail out which was with money he simply does not have. Gordon is going to struggle to keep all the balls in the air.
- Paul, London
Oh look: Mandelson and Campbell are back! So far this week we've had Gordon moving out of No. 10 into an open-plan office to be more approachable; To Understand Gordon You Have To Understand His Fear of Going Blind; 'I'm no Hero' says Gordon (I don't think anyone suggested he was?) yadda-yadda-yadda z-z-Z
Despite a Communist Oligarchy running the joint, he cannot 'order' petrol stations to cut their prices. HOWEVER: he can order the Treasury to cut the duty on fuel - why hasn't he done that?!
- Roz, Chamonix, France
Gordon is "ordering" fuel companies to lower their prices, but what aboud ordering the government to lower the duty tax that is paid for fuel? Did you know that gor 115.00 that you pay on petrol 0.3735 is the actual price of the product its self? The rest is chaged as follow: 0.5035 Duty Tax (!!!!!) 0.1713 VAT and 0.1017 Retailer Delivery Charge. So instead of asking companies to put their fuel prices down why don't you ask your government to lower the extortion so called "duty charge" that is robbing our pockets every single day??
- Marios Tsokkos, london
Bit rich isn't it Gordy?
How about you reduce the tax level on petrol, and leave petrol companies alone?
Typical labour blame someone else for the problem, in this case the oil companies for the price of petrol on the forecourt
- P I Staker, London
Let's not forget that road fuel is taxed twice by the Rt Hon Dick Turpin. 17.5% VAT is added to the total cost, including the duty. Taxed tax!
- Keith Lonsdale, Doncaster
Cut the duty. It`s a simple as that.
- Stephen Curtis, London, UK
First of all Mr. Bean Brown cannot order garages to price what he likes - they are still private I think. (It is the banks that are now under his crazy state control). Secondly why did he not lower his taxes when it was most necessarily and when petrol was at more than $120?!??
- Jacqueline, Hampstead, London
Just been to Tesco and their petrol is still 105.9. So much for them saying they had reduced the price of their fuel!
- Jan, London
If Mr Brown cares about motorists' pain he simply has to tax fuel at a fixed rate, rather than a percentage of the net price. With the take from income tax about to plummet, he's not going to do it, as everyone knows. Do politicians realise, and not care, how shabby their comments look, or do they really think we are as stupid as they would like us to be?
- Mdj, Leyton, e10 london
If he really feels that he can do that with fuel prices, then what about power costs? If Brown ever comes back to this planet, let's hope he goes to a different part of it. Iceland sounds quite appropriate.
- L.Taubler, London / UK
I hope he will order the energy utility companies too, ripping us off on artificial high tariffs and making excuses.
- Ll, Ipswich, UK
Perhaps if Gordon is soooo concerned about the price of petrol / diesel, perhaps he may consider reducing the amount of tax he applies.
If he is worried about people being able to afford heating this winter, then how about removing vat?
No, he has no real interest in doing anything other than strut around pretending to be saviour of the world. Ironic that his appeal comes shortly after some of the supermarket chains reduced the cost of petrol below £1 per litre. Next week he will be crowing about how he, single handedly, brought fuel prices down.
- Inoff The Red, London UK
Petrol isn't going to be as cheap as before because oil is priced in Dollars and the Pound has devalued significantly in recent months. Labour Governments always end up with a devalued pound!
- M Wood, Somerset, UK
Oh dear. Gordon has bought into the banking sector and now he thinks we're a socialist economy. Wait for it, the price of staying in his job will be a major via to the left.
- Mark, London
Of course Brown can't 'order' any such thing, he can 'suggest'. Merely another case of pathetic spin from Downing St. We are not that stupid to fall for such silly word manipulation.
- Simon Caleb, London
Perhaps Mr Dynamite at No 10 could frogmarch the greedy folk from the energy companies into his office and force them to lower their prices too?
- William Grierson, Kimpton, UK
What a lot of rubbish.
Why should the oil companies take any notice of HIM. Also, although I do not want to defend the oil companies don't forget that the £ has tumbled against the $US.
If the oil companies do decrease the price then Brown will slap on extra duty - is that his real agenda?
- Anglo, Sussex UK
As the bulk of the cost of petrol is tax,why doesn't he lower it, instead of ripping us off.
- Paul G, Epsom UK
"Brown orders fuel price cut"
No...not GB... He isn't trying to set things up for a snap election. What ever makes you think that! The call to cut prices looks good on paper of course, but the effects will not come into effect until after any election - by which time he could blame any failure to bring prices down on market forces (or the Tories of course).
Heads up, people - consumate politician in the house! Careful how much you give him (he'll only ask for more).
- Rogan, Irving
I have heard that the London Transport bus as well as train services will go up early next year. With reductions in fuel cost will there be a review of costs before increasing prices?
- Shamim Gardner, Ilford , UK
Well if he is 'ordering' Fuel companies to cut petrol and diesel prices at the pumps, then he should also cut the levels of Fuel Duty as part of the taxation. But it seems unlikely at this stage.... he needs all the 'Dosh' he can screw out of Joe Public.
- Uncle Vanya, Chelmsford England
There's a very easy way for Mr Brown to ensure that the oil price comes down. Reduce the tax we pay on it. However, Mr Brown is relying on the reduction in the oil price to cover up the fact that he intends to increase tax on fuel by 2p.
- Claire, London
"Orders"? Do we have a command economy now?
- Delphine, Oxford
As I understand it, gas and electricity prices are connected to oil prices, how about old Gordon demanding that the gas and electricity companies cut their fuel charges. He seems to have a blank space on that one. Maybe it's because everyone has to pay and the VAT receipts must be pretty high at present.
- Kathy,, Orpington
Is Gordon trying to claim credit for the petrol prices coming down. Asda and the other supermarkets have already beaten him to it. Another spin from labour.
- Dave Smith, Croydon
'Brown orders fuel price cut' - what total rubbish. The price of oil is coming down and the most shameless and hypocritical, not to mention mendacious, man in Britain once again tries to make something look like his doing. He should be dragged from office before he goes totally bonkers!
- Nano, London
GB takes 60 - 75% of price. So why is he asking for tax cuts, all he has to do is cut the tax.
- Advice, London
Broon will dither and nothing will happen - probably won't make any difference to his election chances as people still hold him responsible for the mess the country is in.
- Simon, London
Perhaps Brown should order that the tax rip off from petrol should be cut. As tax is the largest component in the total price this should be reduced, especially as most of this money does not get spent on road maintenance or construction.
- Adam, Harrow, UK
