HC Deb 25 July 1983 vol 46 cc772-4
7. Mr. McQuarrie

asked the Secretary of State for Energy if he will consult the various oil companies operating in the United Kingdom which sell petrol and diesel fuel to forecourt operators to see whether a system of stabilisation of prices can be agreed for urban, rural and island areas in the United Kingdom.

Mr. Buchanan-Smith

Petrol prices should be determined by competition, not agreement, between the oil companies.

Mr. McQuarrie

Is my right hon. Friend aware that the Treasury's tax take is 53 per cent. of the windfall which is 5.7p more this year than at the same time last year? Is he further aware that the maximum forecourt margin is 6.5 per cent. in the rural areas? There is no way in which people can operate in these circumstances. I accept that competition is desirable, but it is a deterrent for rural areas because of the subsidies granted to the urban districts. Will my right hon. Friend ensure that something is done for a generalisation of prices throughout the country?

Mr. Buchanan-Smith

Matters of taxation are for my right hon. Friend the Chancellor of the Exchequer. No doubt my hon. Friend will channel his remarks in that direction.

In certain urban areas companies have been active with the temporary sales allowance, but now more encouragement has been given for the temporary sales allowance in rural areas. That is a move which I shall seek to encourage with the oil companies.

Mr. Ashdown

Is the Minister aware that the effect of statutory istrument No. 909, the Petroleum Stocks (Amendment) Order, will inevitably mean that certain smaller petrol companies, many of which serve the rural areas, will have to find an extra £500,000 to finance their stocks, which will, by the Government's own admission, result in a 2p to 3p increase in petrol prices and will also, by the Government's own admission, result in the closure of outlets? Does the Minister realise that this will yet again disproportionately hit rural areas? Has he any intention of annulling or amending that order?

Mr. Buchanan-Smith

I do not agree with the hon. Gentleman. The purpose of that order is to ensure the security of supplies to those areas. I regard it as equally important to ensure the same security of supply to the rural areas as we do to the urban areas.

Mr. Arnold

Do not companies such as Nickerson Fuel Oils Limited, the directors of which went to see my right hon. Friend Lord Gray of Contin, face the possibility of going out of business as a result of the order?

Mr. Buchanan-Smith

I have had no representations to that effect.

Mr. Bermingham

Bearing in mind that the Government's stated intention is to decrease inflation, and their announcement this afternoon of further sales in oil and energy, does the Minister agree that to sell off assets in oil and energy will diminish the Government's influence in trying to stabilise energy prices across the country, for example for petrol? Does he further agree that what he is doing is minimising the efforts that he can make?

Mr. Buchanan-Smith

I would be interested to know whether BP operates a more competitive policy than other companies in the rural areas. If it does, and the hon. Gentleman can demonstrate that, I shall consider his question.

Mr. Bottomley

Does my right hon. Friend agree that competition should not be organised by the Government, and the important thing is that any person or organisation in the petrol business should be able to offer lower prices to get a higher market share without turning itself into a major oil company?

Mr. Buchanan-Smith

That is a good thing. A significant factor for the rural areas is the tremendous effort many of these companies make to maintain those supplies.