HC Deb 29 October 1984 vol 65 c989
1. Mr. McQuarrie

asked the Secretary of State for Energy what discussions he had with oil companies prior to the latest increase in petrol and diesel prices.

The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith)

Product price increases are a commercial matter for the oil companies.

Mr. McQuarrie

That was a short and sharp reply, but does my right hon. Friend accept that as the Chancellor of the Exchequer was able to put 6p on the taxation of petrol, which seriously affected the rural areas, it should not be outwith the bounds of possibility for the Department of Energy, under the Secretary of State's control, to discuss with the oil companies the ever-escalating cost of petrol in the rural areas? It is having a devastating effect on employment, and my constituents and I look to my right hon. Friend the Minister of State to take action, if possible, to seek reductions in petrol rather than continual increases.

Mr. Buchanan-Smith

I know that my hon. Friend has always been extremely active in this area, but he will agree —he and I represent the same part of Scotland—that there is considerable competition. I think he will be reassured to know that the Director-General of Fair Trading maintains a review of what is happening in the market. I am sure that he is aware of the sentiments expressed by my hon. Friend.

Mr. Speller

Does my right hon. Friend agree that while higher prices bring more revenue, lower prices reduce costs in all parts of the economy? Does he further agree that, in the rural areas, where we do not have reasonably priced fuel, there will be more depopulation and less industry?

Mr. Buchanan-Smith

I am very much aware of the problems in the rural areas, but the recent increases were very much related to what is happening in the crude oil market, and I am sure that my hon. Friend appreciates that.

Mr. Rowlands

May we have a fuller explanation of the Government's position on oil prices? On the one hand North sea oil prices are being cut, yet we are draining that oil at a mad pace, and on the other we seem to be on our prayer mats, praying that the Organisation of Petroleum Exporting Countries will cut production and keep prices up. Do the Government want lower oil prices in general, or do they want OPEC to succeed in artificially keeping prices up?

Mr. Buchanan-Smith

I am sorry that the hon. Gentleman does not appear to have read the minute that was submitted to the House last week in relation to the British National Oil Corporation.

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