Everybody knows that the price of motoring fuel is too expensive. Often, this is blamed on the taxman: at nearly 60 per cent of the cost of fuel, it is a toxic tax that affects the price of everything. Of course, we should recognise that fuel duty is 13p cheaper in tax terms thanks to actions by the Chancellor, but fuel duty needs to be a top priority for tax cuts as soon as financial conditions allow.
But the desire to see lower fuel taxation often means that the wider debate on the price of fuel is overshadowed. This changed in May this year when it was announced that the European Union had raided the offices of several oil giants to look into allegations of price fixing.
Many have long suspected that there may be some manipulation of oil prices. Even with the fuel duty freeze, the price of fuel continued to rocket upwards. Of course the global price of oil continues to play a significant role, but it is often forgotten that when the global oil price goes up, the price of fuel rockets up. Surprise, surprise, however, that when global oil prices go down, oil companies are slow to pass these savings on to the consumer.
And this is just a drop of oil in a very murky ocean. I have even been contacted by whistleblowers with disturbing stories of oil price manipulation.
That is why I joined up with Fairfuel UK to press the OFT to investigate allegations of oil price manipulation last year. Along with other MPs, I called for an inquiry in the House of Commons and received cross-party support.
The OFT held a short inquiry on whether to have a full inquiry, and decided there was no charge to answer, saying that the markets were working normally. Needless to say, the public were not convinced. And it has been left to the EU, and the United States, to investigate allegations of price-fixing.
So what can we do about it? On Monday morning at 9am, I am joining up with Fairfuel UK, alongside other MPs and consumer groups, to present the Fairfuel UK petition that has the signatures of over 30,000 British motorists. The petition demands a proper UK-led inquiry lasting 18 months into the great oil company rip-off. It is time that the OFT acted on the unanimous will of Parliament, and mounting public anger, to carry out the full inquiry that motorists and others deserve.
The price of fuel is not just one of economics, but also one of social justice. The cost of fuel hits the poorest twice as hard as the richest. The average Briton spends 10 per cent of their disposable income on fuel each month, but it has been estimated that the poorest 800,000 spend 27 per cent of their disposable income on fuel. But cars are essential to our society – 71 per cent of us still drive to work – and evidence shows that those who cannot travel to work stay unemployed longer.
Robert Halfon is Conservative MP for Harlow.
Give the perfect gift this Christmas. Buy a subscription for a friend for just £75 and you’ll receive a free gift too. Buy now.