Oil Prices (Supply)

Energy and Climate Change – in the House of Commons at 10:30 am on 10 February 2011.

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Photo of Nick de Bois Nick de Bois Conservative, Enfield North 10:30, 10 February 2011

What assessment he has made of the likely effects on oil prices and supply of the political situation in Egypt.

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

What assessment he has made of the likely effects on oil prices and supply of the political situation in Egypt.

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

Egypt accounts for 2.1% of the world's oil production. We do not expect that disruption to Egyptian oil production and oil transiting the Suez canal is likely. The secretary-general of OPEC and the Saudi oil Minister Ali al-Naimi have both stated that, in the event of disruption to the Suez canal, OPEC would increase production to provide market-calming measures. About 5% of overall crude and petroleum products goes through the Suez canal.

Photo of Nick de Bois Nick de Bois Conservative, Enfield North

I thank the Secretary of State for that answer. Will he outline what measures his Department may be planning to affect price stability?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

My hon. Friend may be referring to the debate that has been going on about the fuel duty stabiliser, but that of course is the responsibility of the Treasury and the Chancellor of the Exchequer. I understand that work is continuing on that. The key for my Department is to ensure that we speed the transition to a low-carbon economy as quickly as possible. We have to get off the oil price hook, and this episode of oil prices rising above $100 a barrel demonstrates the urgent need to make good progress on that, which is precisely why the Government are, for example, bringing forward subsidies for electric vehicles, pushing within the European Union for tougher standards on energy-efficient vehicles, and why we have the green deal. We want to ensure that our population is not vulnerable to precisely those sorts of shocks. Our policies will be-

Photo of Nigel Mills Nigel Mills Conservative, Amber Valley

I am grateful to my right hon. Friend for that information, but, given the current high price and the risk of uncertainty increasing it further, does he agree that there is now no need to encourage my constituents and his to change their behaviour through further duties, and that if we do such things we risk driving our constituents out of economic activity completely?

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

As I say, the fuel duty stabiliser is a matter for the Treasury. I merely point out that, over time, all European countries-in fact, all developed countries with the exception of the United States-have taken the policy view that, for all sorts of reasons, including national security, we should encourage energy efficiency in our oil use. Any short-term concession that goes against that will make us more vulnerable in the long term.

Photo of Hugh Bayley Hugh Bayley NATO Parliamentary Assembly UK Delegation

I agree with the Secretary of State that our country needs to reduce its dependence on oil. Does he agree with me that the Government should do all in their power to promote democracy in north Africa and the middle east? Democratic countries are better for the people who live in them, better in terms of human rights and make for better trade partners of countries such as our own.

Photo of Christopher Huhne Christopher Huhne Liberal Democrat, Eastleigh

Mr Speaker asks me to relate oil prices to democracy, which is the sort of A-level question that would test any Member.

Obviously, and crucially, open societies in particular are easier to deal with and easier to understand, and in our experience they tend to be more stable. That is a point we make to our friends right the way around the world.