Oil giants must pass on price cuts, says government

Companies that fail to pass on the benefits of falling oil prices to motorists at the pump are being targeted by the government. Under plans being considered, oil firms that profiteer from decreasing prices would be named and shamed, reported The Sunday Times.

Last month transport secretary Justine Greening warned oil giants and supermarkets against overcharging drivers. ‘If they think that was a soundbite by the secretary of state and we’re going to go away, they can forget about it because it wasn’t,” said transport minister Norman Baker. He added: ‘We’re not going to stand by and see motorists not get a fair deal.’Fuel retailers are accused of passing on price increases quickly but delaying price cuts to increase profit margins.

Figures from the AA showed that the wholesale price of petrol fell by 10p a litre between mid-April and mid-May but pump prices were down by an average of just 7p.Baker said he was unaware of any oil firms having contacted the Department of Transport in response to the warning.

Fuel retailers claim the move is the government’s attempt to distract from an increase in fuel duty. A 3.6p increase begins from August 1.

RMI Petrol chairman Brian Madderson commented: ‘It is appalling that the Government has failed to engage with the fuel retailing industry before issuing misleading information for short term political expediency. They clearly irritated by continuing and justified media and public criticism of their unflinching stance on the planned fuel duty increase this summer.’