PETROL PRICES: Why the Government promised to stop oilco profiteering, and why they did nothing to stop oilco profiteering

camos2615eggTORY OILCO GUSHER PRODUCES NOTHING BUT BANANA OIL IN PRACTICE

Conservative Party links to the oil business are myriad…but they rarely if ever benefit British citizens. The Slog investigates how many Tory palms are being oiled.

I mid April this year, the nearest thing to a British car driver’s Union – the Automobile Association – made clear empirically derived conclusion that motorists were once again paying more at the gas stations for petrol….even though the world commodity price of oil had halved.

The AA bemoaned the fact that few if any politicians during the General Election had made reference to this obvious profiteering, sorry, anomaly. It should have been an open goal for Labour, but once again the self-styled Party of the Underdog – ‘Your friend in tough times’ – failed to score. Clearly, Labour HQ was keeping its powder dry until such moment as a transgender victim came to light.

In the first half of April, the oil price per barrel fell 5%…while average petrol prices in Britain rose from 111.92p a litre on 16th March to 113.29p a litre on 15th April. Media sources as diverse as the Daily Telegraph, the Guardian, the Sun and the BBC all wrote about and condemned what the oilcos were up to. If the Conservative Party was really that of The Working People, it could have scored major brownie points by vowing to clamp down if and when elected.

But neither Party did anything.

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In the last Parliament, David Cameron came under pressure briefly during a PMQs session about the oil industry’s naked price manipulation. He maintained that it was a complex subject (it isn’t) but later declared himself to be “extremely concerned” by the idea that oilcos were screwing the petrol consumer.

His doubts about it seem odd in the light of a study for G20 finance ministers, including George Osborne, which had previously concluded that traders from banks, oil companies and hedge funds “have an incentive to distort the market and are likely to try to report wrong prices”. But at any rate, soon thereafter, the Petrol Retailers’ Association made clear that it had repeatedly warned regulators about the oil price being manipulated….quoting the 2012 case of an 8p rise in the price of petrol that could not be explained “by basic supply and demand, unusual geopolitical events or other factors”.

Perhaps as a result of this, the UK Office of Fair Trading carried out an enquiry into petrol prices, emerging to give the oil business a clean bill of health in January 2013. The findings evoked groans of cynicism from even hard-bitten MPs, but the enquiry’s credibility was blown sky-high when, five months later, the offices of BP and Shell were searched by European Commission investigators armed with strong evidence and suspicions of rigging the oil price.

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So it was that in January of this year – after a massive drop in the price of crude oil – speaking during Prime Minister’s Questions, Democratic Unionist MP Gregory Campbell asked Prime Mister Cameron: “You will be aware that the public and small businesses across the UK have had to endure very high fuel bills in recent years when oil prices averaged over 100 US dollars a barrel. In recent weeks that price has been steadily dropping and now stands at less than half that, but fuel prices at the pump have not reduced by anything like that. Last week, George Osborne indicated that some action would be taken against fuel companies. Can you outline what action?”

Woffling for Britain, the PM replied: “I think we should welcome this fall in oil prices. We’re beginning to see prices fall quite substantially at the pumps but I agree with him we want to see that go further and faster.

“Some of it will depend on the buying strategies that the fuel companies have but we will make sure the Competition Authority, the Government, does everything it can to make sure those fuel prices are passed on.”

But today, the price of oil is languishing at a level very close to what it was then. Clearly, the Competition Authority’s everything didn’t cut any ice, because petrol prices are rising again….for no good reason.

Dodgy Dave never did tell Gregory Campbell what the action was going to be. The reason he didn’t probably had something to do with his certainty that nothing was going to be done.

To sum up, in the light of SME and AA outrage, an MP reminded the Prime Minister that his Chancellor had promised “to do something about” the oil companies’ pricing structures, and when asked by that MP what form the action would take, he too said he expected regulators and his government to do everything in their power to ensure that George Osborne’s promise was fulfilled.

Following which, nothing happened. Much as I enjoy the role I’ve been give by the May-Cameron Committee on non-violent extremism, I would regard this post as somewhat out of character for me: it is neither violent nor extreme. It merely asks the Government to govern. That is, to govern on behalf of the people, as opposed to its donor-chums.

The following established and audited facts might help explain why nothing has happened; and even if it does, the oilcos will be exonerated:

The Conservative MP Peter Lilley owns oilco share options worth at least £370,000

Former Tory energy Charles Hendry minister has a second job with controversial oil firm Vitol that pays him £60,000 per annum

Former Tory Minister Alan Duncan has worked in and for the oil business since 1992

North East Somerset Conservative MP Jacob Rees-Mogg was reported to Parliament’s standards watchdog for potentially breaching the rules on declaring financial interests in the House of Commons, in that he he has £2.4 million invested in the oil industry.

In 2014 Energy Select Committee chairman Tim ‘Taxis’ Yeo received £38,874 from AFC Energy, where he chairs the board.

Conservative energy ministers (including David Cameron and George Osborne) have held 99 meetings with the Big Six utility firms in the last five years.

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Donors linked to energy firms have given £3.4million to the Tories since Cameron became leader in 2005. Since May 2010, Tory donations from individuals and firms in the energy, oil and gas sector have totalled £2.6million.

One of the Tories’ biggest donors and a major contributor to the Scottish “No” campaign runs a vast oil-trading company which has potentially avoided UK corporate taxes on billions of pounds of profit with the blessing of the tax man.

Ian Taylor is one of Britain’s richest men due to the massive profits of the oil-trading giant Vitol which he runs as chief executive. He has donated £500,000 to the Better Together campaign on Scottish independence and has given the Conservative party £550,000 since 2006.

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At least five people at a Conservative fund-raising dinner exposed by The Guardian and Bureau of Investigative journalism had financial or commercial links to the UK’s unconventional gas industry, including many who shared a table with energy minister Michael Fallon bought by Shore Capital.

The Mayfair-based investment bank is 41% owned by Howard Shore a controversial banker with well publicised Tory links, who also heads up the firm.

His small investment bank is listed in a Conservative register of major donors attending leaders groups meals. Howard Shore was seated alongside the Prime Minister, David Cameron.

Shore Capital has a natural resources division which “have expertise in some of the world’s most exciting emerging hydrocarbon provinces, and in unconventional hydrocarbons such as shale resources and coal bed methane”.

Alexander Temerko, a Ukraine-born billionaire investor in oil and gas, gave more than £700,000 to the Conservative Party in the last Parliament.

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Sorry to repeat  -and sorry people out there can’t seem to grasp that if you want fair government, then there’s a price to pay: until we take all political Party funding away from the donation model entirely – and ask the taxpayer to fund their overheads via some remote, mutual body – there will be no government for the People.

In the meantime, pay attention: there’ll be no more wimpy shilly-shallying around with a bunch of Trot car drivers – let’s get fracking! And now my Subjects….a Bill to control how much Trade Unions can give to the Labour Party, a Bill to check everything the BBC says before it’s aired, a Bill to put wind farms underwater, a Bill to treble the HS2 budget, a Bill to buy Mr Murdoch bigger boots, the better with which to trample on the BBC….

Yesterday at The Slog: Falling consumption, plummeting exports and failing Greek debt negotiations.

20 thoughts on “PETROL PRICES: Why the Government promised to stop oilco profiteering, and why they did nothing to stop oilco profiteering

  1. What about my interests !

    Can there not be a Bill for the UK Govt.. to purchase me a reserve set of, industrial
    grade freezers in case my current model perishes and I am denied my nightly restorative sleep !!

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  2. We are indeed sleepwalking into a Fascist paradise, and are already halfway there. As Mussolini declared, fascism is the co-joining of Corporate and Political power.
    All predicted by the very prescient Karl Marx, who was aware of the contradictions inherent in Capitalism and wrote that the endgame of capitalism would see the looting and plundering of the State (privatisation) , the subjugation of the working class and extermination of the middle class by the offshoring of the means of production.(employment)
    Austerity is the last stages of this Corporate looting and neo-liberalism is the false doctrine, promoted by corrupt politicians and economists, to facilitate its execution.
    Note the secret propagation of the so-called Free Trade agreement TTPP. which is the Corporate take over of Western Democracy.
    The EU will just be their rubber stamp.

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  3. So the oil co,s are ripping us of,is anyone surprised? more to the point who is not,the bigger the company the easier it is for them because of there association with government! who are in turn being bribed by them, nobody thinks there government is there to serve them.

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  4. According to the Daily Wail, Energy Secretary Amber Rudd wrote to energy bosses yesterday demanding they pass on a 20 per cent fall in wholesale gas and electricity costs.
    Before the election the firms insisted they could not make large cuts in case a Labour government crippled them with a price freeze.
    Despite the Tory victory removing this risk, the ‘Big Six’ suppliers are still refusing to slash bills.
    Yet just last week SSE, the UK’s second biggest supplier, reported a 50 per cent rise in profits to £369million.
    Similarly bumper results are expected from British Gas, Npower, EDF, E.on and Scottish Power.
    Let’s see just how successful she is.

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  5. A government of the Corporations, by the Corporations, for the Corporations.
    Labour or Conservatives = different sides, but still the same coin.
    UKIP or SDP just distractions for the masses while the real game continues.
    @ Salford Lad, spot on, but at least I am of an age when I don’t really care any more. I just watch from the side lines and let it all happen.

    http://www.poemhunter.com/poem/do-not-go-gentle-into-that-good-night/

    Do not go gentle into that good night,
    Old age should burn and rave at close of day;
    Rage, rage against the dying of the light.

    Though wise men at their end know dark is right,
    Because their words had forked no lightning they
    Do not go gentle into that good night.

    Good men, the last wave by, crying how bright
    Their frail deeds might have danced in a green bay,
    Rage, rage against the dying of the light.

    Wild men who caught and sang the sun in flight,
    And learn, too late, they grieved it on its way,
    Do not go gentle into that good night.

    Grave men, near death, who see with blinding sight
    Blind eyes could blaze like meteors and be gay,
    Rage, rage against the dying of the light.

    And you, my father, there on that sad height,
    Curse, bless, me now with your fierce tears, I pray.
    Do not go gentle into that good night.
    Rage, rage against the dying of the light.

    Dylan Thomas

    JW, don’t let the bastards grind you down. It’s business, not personal.

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  6. “Some of it will depend on the buying strategies that the fuel companies have but we will make sure the Competition Authority, the Government, does everything it can to make sure those fuel prices are passed on.”
    But today, the price of oil is languishing at a level very close to what it was then. Clearly, the Competition Authority’s everything didn’t cut any ice, because petrol prices are rising again….for no good reason.

    Whilst not disputing that price manipulation by oil companies may be a factor, it is also worth bearing in mind that:
    1) Refinery costs are increasing – light, sweet crude is getting scarcer and there is less refinery capacity for heavy, sour crude thus driving costs of refined products up
    2) Sellers of refined products (such as petrol) negotiate contract prices from their suppliers that are set for a number of months; a changing crude price will not impact on those contracts, only on future contracts – in effect there is a time lag in the system between oil and petrol prices
    3) There is no single “price” for oil – different blends sell for different rates depending on how heavy/light, sweet/sour the blend is, how much refining capacity is available, how much transportation is needed etc.
    4) Oil products sell on a global market; refined products sell on a local market

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  7. Rowan,
    You make some important & valid points there, however regarding point 2 – as has often been pointed out by many – prices at the pumps increase very hot on the heels of a rise in crude prices (rising even before the petrol station has had a new delivery).

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  8. It is a principal of business buy cheap sell dear, if you don’t want to buy the petrol then either walk or catch a bus, the oil campaniles are not charities they are a business.

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  9. I often have to travel late at night & just recently i have noticed traffic lights in all directions on red stopping cars,this adds two minutes on my journey were am burning petrol but going nowhere & mileage to gallons has fallen because of this when the roads are empty,during daytime the ques & stationary traffic has increased adding 5 m to my time or a extra 1.5 miles money going straight to the corporations & out of the local economy. Hayek got something right but instead of using it to help plebs it once again used to destroy local economies,1 car £4 pm 12m cars 48m pm going away from bastiast window of opportunity to local businesses nationwide.greed destroys economies that’s why profiteering was made illegal in the middle ages!

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  10. & your stupid people i know would either have to walk for 4 hours (12m )to turn around to head back for the next shift,no buses at night ,so would have to spend everything they have earned on a taxi,unable to eat how would you expect them to live,theirs fools then their is people like you !

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  11. Rowan cartels are suppose to be illegal yet OPEC is allowed to fix production,control supply & fix the price buy having that ability,whilst what you say is accountancy talk of process in reality the profit is manipulated & changed to profit & losses to offset taxation,if any profit is made here, it is wiped out by losses in other years to pay little or any tax whilst profit is taken when the ship stops for refuelling in the tax haven,so all that you write is just accountancy waffle!

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  12. When I used to work for Saudi Aramco I used to go diving with an American guy called George, he used to deal with the cheque’s for 9 and 10 digit values , he had a couple of “wee Indians” who dealt with the smaller values , 8 and less. There is a lot of money around and as history keeps telling us , those with it guard it well.

    Like

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