Petrol Prices

Oral Answers to Questions — Oral Answers to Questions – in the House of Commons at 12:00 am on 5th December 1977.

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Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarvon 12:00 am, 5th December 1977

asked the Secretary of State for Prices and Consumer Protection if he is satisfied with the price structure in the sale of petrol whereby motorists in rural areas, where car travel is a necessity, pay considerably higher prices per gallon for petrol than those in urban areas, where private cars are not a prerequisite of everyday life.

Photo of Mr Robert Maclennan Mr Robert Maclennan Parliamentary Under-Secretary (Department of Prices and Consumer Protection)

The Government are monitoring this problem carefully. A report published by the Price Commission in 1975 set out reasons for variations in petrol prices, and further information was provided in 1976 by an interdepartmental inquiry. The Monopolies and Mergers Commission is currently studying certain aspects of the wholesale supply of petrol and is to report by 2nd February 1978.

Photo of Mr Dafydd Wigley Mr Dafydd Wigley , Caernarvon

I welcome the Minister's indication that there may be progress in this matter. However, is he aware that there was a difference of 7p per gallon this weekend between my constituency and London in the price of four-star petrol? Given the differences in income, with average family incomes in Gwynedd up to 30 per cent. lower than the average for the United Kingdom, does not the Minister feel that this is an urgent matter that needs attention as quickly as possible?

Photo of Mr Robert Maclennan Mr Robert Maclennan Parliamentary Under-Secretary (Department of Prices and Consumer Protection)

I accept what the hon. Gentleman says about the differences, and he knows the reasons for them. They are in part that there is very much more competition in the urban centres, where there are many more—[HON. MEMBERS: "Ah."] I wonder whether Opposition Members who say "Ah" approve of this competition, because the Government do and are taking measures to strengthen the competition through the operation of the Price Commission, to which the Opposition have consistently taken exception.

The hon. Member for Caernarvon (Mr. Wigley) is right to express concern about this, and we are anxious to do all within our power to improve the situation. We believe that the reductions in duty in the summer, coupled with the reduction in price by the companies, have helped the rural areas particularly.

Photo of Mr Tom Litterick Mr Tom Litterick , Birmingham, Selly Oak

Is the Minister aware that there is now a glut of crude oil supplies throughout the world? In spite of the glut of crude oil and conventional economic wisdom which tells us that in such circumstances the price of oil should fall and the price of all hydrocarbon products should fall, this is not happening. Will my hon. Friend attempt to give an explanation?

Photo of Mr Robert Maclennan Mr Robert Maclennan Parliamentary Under-Secretary (Department of Prices and Consumer Protection)

I think that I should require to give too lengthy an answer if I were to engage in a debate with my hon. Friend about that. He knows that the prices of particular petrol companies, which have to be notified to the Price Commission in advance, are subject to rigorous scrutiny by the Price Commission under the new Act.

Photo of Mr Tim Smith Mr Tim Smith , Ashfield

While welcoming the Minister's recent statement about cash discounts on the retail sales of petrol, may I ask him to explain to the House why it is not possible simply to introduce regulations stating that garages will sell petrol at a particular price per gallon and outlaw the practice of selling at X pence per gallon less Y pence discount?

Photo of Mr Robert Maclennan Mr Robert Maclennan Parliamentary Under-Secretary (Department of Prices and Consumer Protection)

Yes, I will. For reasons that will have been obvious to a number of hon. Members, it would be anti-competitive so to do. It would not give the consumer any benefit. To set a maximum price, or, for that matter, a minimum price, is anti-competitive. That is what the hon. Gentleman is recommending. It would be wholly wrong. The Opposition must make up their minds where they stand on the issue of compe tition. The Government are anxious to ensure that there is effective competition to hold down prices.