Oil Products (Prices) (Hansard, 17 December 1974)

§ Mr. Varley

As I said in my statement last week, the oil companies have notified the Price Commission of their intention to increase prices of oil products, mainly in consequence of higher prices for crude charged by the producing countries. The increases will differ from company to company, and in accordance with the policy which I outlined last week it is intended to weight this increase on petrol. In consequence, the oil companies will increase the price of petrol by some 7p a gallon. In addition, we recognise that some increase is warranted in the retail margins of the smaller dealers.

I have reviewed the maximum retail price controls on petrol, derv and paraffin in the light of these developments. These controls were introduced a year ago by the previous administration at a time of shortage to protect the consumer. The situation has now been transformed. Products are now in ample supply and there is widespread competition in the petrol market, with price-cutting and special promotional offers. The control on petrol and derv prices no longer fulfils a useful purpose, and it will therefore be lifted with effect from midnight, Thursday 19th December.

I have made it clear to the trade that I do not expect the pump price of petrol to increase by more than l0p a gallon when account is taken of VAT, and in many cases it should be less. We shall be keeping a very careful watch on the situation, and I shall not hesitate to re-impose the controls should it become necessary. In the meantime, of course, both oil companies and retailers will have to conform with the full provisions of the Price Code.

Different considerations apply to paraffin, which is of special importance to low-income users. Some increase in price is necessary to ensure that supplies are forthcoming and that the number of 366W retail outlets is maintained. I am amending the maximum retail price order to allow an increase of 3p a gallon with effect from midnight, Thursday 19th December.