RMI Petrol has branded the news that David Cameron and Barack Obama are discussing plans to force down the price of fuel by releasing reserves of oil to boost global supply as more “smoke and mirrors” ahead of the budget next week.
Brian Madderson, chairman of RMI Petrol, said: “One is rather sceptical of this kind of filibustering because we’ve got the budget next week. The Prime Minister should take action by controlling what he can control, which is tax, because he can’t really control global oil pricing. There are much bigger fundamentals influencing the price of fuel in the UK.”
The International Energy Agency (IEA) has said that releasing emergency stocks is not option. Speaking at a conference in Kuwait on Wednesday, IEA executive director Maria van der Hoeven, said: “At the moment there is no need to use it. There is more supply coming to the market from OPEC countries. There is no price trigger for the stocks release, the trigger is a disruption in physical supplies.”
The Prime Minister discussed the idea of releasing oil reserves with the US President at the White House, but no decision was taken to put the plan into action in the immediate future. It is understood that under the plan being mooted, the US would release for sale some of the 700 million barrels of oil they hold in reserve. As the British government doesn’t hold significant reserves, it is expected to reduce the level of minimum reserves it currently demands that oil companies hold.
Answering questions from students at New York University during his tour of the US this week, Cameron said that, by comparison with US forecourts, petrol prices in the UK “would probably make you faint”. But he accepted that the continuing high price of fuel was holding back both economies, and said he wanted to do something to help consumers.
The Prime Minister said: “President Obama and I discussed this issue yesterday. Obviously, petrol prices are having a big effect on families, there’s no doubt about it. It does have a big effect on consumer confidence, it affects household budgets. We would both like to see global oil prices lower than they are today. We didn’t make any decision about the release of global oil reserve stocks. We did this last year when there was supply disruption because of the disruption in Libyan production.
“We have got to look at this issue carefully because any move on this front would have to be to recognise supply disruptions and therefore to try to smooth out the price. But I think it is worth looking at because it is having an effect on all our economies, on all our families, on our budgets.”
Fuel prices in Britain are continuing to spiral – with the average price for petrol edging closer to 140ppl today at 139.17ppl and diesel reaching 146.02ppl.