Osborne warning over low oil prices

Published: Tuesday 6th January 2015 by The News Editor

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George Osborne has put energy firms, airlines and others on notice that they must pass on the benefits of a dramatic fall in global oil prices or face possible state action.

The Chancellor has initiated a Government investigation into whether key sectors such as utilities are reducing consumer bills and is said to have told colleagues at today’s Cabinet meeting that businesses would be “watched like hawks”.

All four supermarkets have announced a 2p cut in the cost of a litre of petrol as slumps leave a barrel of Brent crude trading at about 52 US dollars a barrel, the lowest price since May 2009.

Mr Osborne said that the move was welcome – noting that it came after heavy media pressure – but that more action was required.

“Vital this is passed on to families at petrol pumps, through utility bills and air fares,” he wrote on Twitter.

A Treasury spokesman said: “The Government is conducting studies of industries like the utilities and the airlines. We are examining if any action needs to be taken.”

Chief Secretary to the Treasury Danny Alexander told ITV News: “The fall in oil price is a benefit to most of the UK economy provided that the benefits are passed on at the pumps, in the cost of holidays and in the cost of heating homes.

“We also need to support the North Sea oil and gas sector because that is adversely affected by this, it is the biggest industrial investor in the UK.

“So, that is why we are also putting in place a more beneficial tax environment.

“But by and large this is a big benefit to everyone else.”

A spokesman for energy firms insisted that price cuts were being passed on in full – with consumers now able to pay £100 less a year if they looked for the best deals.

Energy UK chief executive Lawrence Slade said: “Energy suppliers are passing on price cuts to customers.

“When people shop around they can easily find deals that are over a hundred pounds cheaper than this time last year and in line with cuts in wholesale energy prices.”

Energy and Climate Change Secretary Ed Davey said: “The Government will be watching energy companies like hawks to ensure falls in wholesale gas prices are passed on as quickly as possible to consumers.

“The competition we’ve pushed has already put real pressure on the Big Six and customers have been leaving them in droves to secure cheaper deals with the smaller players.

“In addition to this new investigation the independent Competition & Markets Authority has already been asked to look at the energy market and has real teeth to act.”

Published: Tuesday 6th January 2015 by The News Editor

Comments (1)
  • Kevin Marshall

    Looks like an advert for Grecian 200 🙂

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