A windfall tax should be applied to the UK oil sector with the resulting revenues used to cut fuel duty, if the EC’s investigation into alleged price-fixing confirms widespread malpractice, it has been suggested.
Robert Halfon, Conservative MP for Harlow and founder of the PetrolPromise.com campaign, said the EC’s decision last week to investigate a number of firms in the oil sector suggested “significant suspicion that something was going on”.
He added: “If this is seen to be widespread, I think the government has got to impose a windfall tax, recover the money that has been lost, and use that to reduce fuel duty”.
Halfon’s comments followed raids across Europe by EC anti-trust regulators on several firms in the oil sector as a preliminary step in investigating suspected anti-competitive practices. The raids, on 14 May, included the London offices of BP, Shell, and oil pricing agency Platts; the Rotterdam offices of Shell; and the Stavanger offices of Statoil. All said they were cooperating fully with the EC.
A statement by Statoil added that the suspected violations, which are related to the Platts’ Market-On-Close (MOC) price assessment process used to report prices for crude oil, refined oil products and biofuels, may have been ongoing since 2002.
FairFuelUK (FFUK) campaign founder Peter Carroll welcomed Halfon’s suggestion about a duty cut, pointing out that a £5bn windfall would knock 10ppl off the fuel price of fuel. He also said anyone found guilty of price-fixing should be imprisoned for “quite substantial terms” as they had helped to “ruin people’s lives”.
Since the EC raids, FFUK has launched a petition calling for UK regulators to look again into the domestic road fuels market. Halfon, too, has called for the Office of Fair Trading (OFT) to reopen its enquiries, branding its previous effort “a limp-wristed lettuce leaf of an investigation”.
In January, the OFT decided not to carry out a full investigation into the UK road fuels market, suggesting that “at national level, competition is working well in the UK road fuel sector” and that therefore an investigation was not warranted.
The Petrol Retailers Association has also called for the OFT to reopen its investigation. A spokesman for the association said it was "pressing for the whole thing to be re-examined" and agreed that if the EC allegations were proven, "those responsible must refund the driving public".
The OFT declined to comment on the calls to look into the UK market again, save to confirm the outcome it announced in January and add: "The investigation is being conducted by and is a matter for the European Commission, and the OFT is currently assisting the Commission with its inspections in the UK".
FTA MD of policy and communications James Hookham said the EC’s allegations were “hugely serious, if proven” but stressed that, serious though the EC’s allegations are, tax remains the biggest issue in the fuel price. “Whatever might be at stake here, the biggest manipulator of fuel prices in the UK remains the chancellor of the exchequer,” he said.
