§ Mr. Fitchasked the Secretary of State for Employment what is the impact on the retail price index of a 5p per gallon 694W rise in the cost of (a) petrol, (b) derv and,(c) both petrol and derv.
§ Mr. Jim LesterThe direct effect of a 5p increase in the retail price of a gallon of petrol would add about 1/5th of one per cent. to the retail prices index at May 1979 prices, but a change in the price of derv would have no direct effect on the index.
Increases in petrol and derv prices also add to the costs of providing goods and services and can thus have an indirect effect on retail prices. If these additional costs are eventually passed in full to the consumer the estimated further effect on the index would be about half as much as the direct effect. Reliable estimates for the separate indirect effects of derv and petrol are not available.