Fuel Prices

Private Members’ Business – in the Northern Ireland Assembly at 4:30 pm on 7 June 2010.

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Photo of Francie Molloy Francie Molloy Sinn Féin 4:30, 7 June 2010

The Business Committee has agreed to allow up to one hour and 30 minutes for this debate. The proposer of the motion will have 10 minutes to propose and 10 minutes to make a winding-up speech. All other Members who wish to speak will have five minutes.

Photo of Jennifer McCann Jennifer McCann Sinn Féin

I beg to move

That this Assembly expresses concern that our fuel prices are higher than in Britain and the Irish Republic; and calls on the First Minister and deputy First Minister and the Minister of Enterprise, Trade and Investment to open up discussions with the major fuel suppliers and the British Treasury to ensure that consumers are not being treated unfairly in terms of pricing mechanisms and taxation.

Go raibh maith agat, a LeasCheann Comhairle. I welcome the opportunity to propose the motion. I am sure that there is no one in the Chamber who has not heard someone express concerns at the rise in the price of petrol and diesel.

Fuel prices have risen steadily over the past year. On average, it is now £12 more expensive to fill a car with petrol and £10 more expensive to fill a car with diesel than it was this time last year. The situation in the North is unique, because although prices are still slightly higher here than they are in Britain, the price differential is even more acute when it is compared with the South of Ireland. Indeed, petrol here is 5·58p a litre higher and it costs an extra £7·50 to fill an average car with diesel.

The Assembly’s Research and Library Services provided Members with an AA report from last month, which shows that the North of Ireland has the highest price for unleaded petrol and diesel when compared with Britain. There is also a problem with localised pricing and a distortion in the prices of fuel supplied by some of the larger retailers in different areas. For example, petrol is cheaper in Sainsbury’s in Coleraine than it is in Craigavon, and Tesco customers in Bangor pay 120·9 p a litre for petrol while those in Belfast pay 123·9p.

The price of fuel is made up of the wholesale price of crude oil, the cost of refining it, taxation, demand, competition and exchange rates. Government tax on fuel, including VAT, makes up almost 60% of the cost to customers at the pumps and, if any significant change is to be made, it must be made in that area. The pre-tax price of petrol and diesel is quite low, and once the 60% tax is added, it makes up almost two thirds of the final price.

Sinn Féin has argued for a special case to be made in the North for other taxes and for corporation tax to be brought into line with the South. A special case should also be made in the North for fuel taxation. We have a unique situation here, because people can drive to the South and get petrol and diesel much cheaper. We must also have a harmonisation of the two tax systems. This is a single island, and we need an all-island tax system.

As I said, we have already debated the need for a separate corporation tax. We need to have that debate and at least explore the issue. Moreover, we must understand that the profits from increases in fuel prices, particularly in fuel duty, do not reach the hands of the Executive here. They go to the British Treasury, which can do what it wants with the money. Therefore, it would be much better if that money were to come to the Executive here to help our communities in other ways.

More people here are dependent on their cars, particularly in rural areas, where public transport systems are less than adequate. When you compare cities such as Belfast to other European cities, we are playing catch-up on public transport. The majority of commercial businesses use the roads for transport and haulage, and those costs are added to the prices that consumers pay.

I want to mention home heating oil. Although the major suppliers of oil to homes for heating are not affected by taxation, we should investigate why prices here are much higher than those in the South of Ireland and in Britain. As we know, gas and electricity are already regulated, and it is time to consider a proposal to regulate oil. I know that the Utility Regulator has said that that is not possible because of the vast amount of oil distributors.

Photo of Jennifer McCann Jennifer McCann Sinn Féin

Sorry, I cannot. I have a lot to get through. If I have time at the end, I will give way then.

Although there is a vast number of oil distributors, there are only four major oil importers: BP, DCC Energy, NuStar Energy LP and LSS Ltd. There is potential to enter into discussions with the main oil importers to regulate that industry.

The Assembly has discussed fuel poverty many times. However, the targets for 2010 in the Programme for Government have not been met. In fact, more households than ever before Times New Roman'; ">― about 50% are in fuel poverty. Most people in areas of disadvantage and deprivation probably live in fuel poverty. We need to look at ways to tackle that. We need to consider what fuel poverty means. It means that older people are sitting in cold homes and acquiring serious health problems as a result. The North of Ireland has the highest proportionate figure in the UK of older people who die as a direct result of fuel poverty. Although we have discussed the issue many times in the Chamber, we need to keep saying it, because recent figures from NISRA show that in 2008, when energy prices were high, there was a 60% increase in the number of cold-related deaths in the North. We need to look at the problem in those terms. When prices go up, more elderly people die because of the cold.

It is important to think about families that have very young children and are income poor. Those children get up in a cold house to get ready for school in the morning and come home to a cold house at night and are unable to study. Some children have to eat cold meals because people do not have enough money to put in their gas meters or electricity meters to cook food. Therefore, when we talk about fuel poverty, we should also remember that some young children are being denied the life opportunities that other children and families might take for granted.

This is not happening in another country; it is happening in our own communities in areas that Members represent. Before the next cold winter, we should try to tackle the issue much more proactively. I appeal to the Executive to do that. I and other Members have previously discussed the introduction of a social tariff for people who are most vulnerable to fuel poverty, especially the elderly and low-income families with young children.

A report on energy brokering was launched today in the Long Gallery. I welcome that report. It puts forward a number of proposals, including one that has been debated in the Chamber before: that social housing landlords could buy energy in bulk for their tenants, thereby keeping costs low for social housing homes.

The report also recommends that local and central government procurement bodies link their energy purchasing, thus creating a better deal for domestic consumers under that price arrangement. That means that when buying energy for this Building, for example, government could use its purchasing power as leverage to allow social housing landlords to buy energy for their tenants more cheaply. That would cascade down to the people who are in most need and who are most vulnerable to fuel poverty.

The Executive should look to the example of Kirklees in England, where the local council targeted entire estates with vulnerable households and made homes there more energy efficient. That costs less in the long term. It is about thinking of innovative ways to do this.

I hope that Members will support the motion. It is only a first step. We can look at transparency in the way that prices are arrived at, and at some form of tax harmonisation in the North and South of the island.

Photo of Séan Neeson Séan Neeson Alliance 4:45, 7 June 2010

Will the Member agree that not only is there no regulation of home heating oil, there is no regulation of coal and bottled gas? Does she agree that those should be regulated?

Photo of Francie Molloy Francie Molloy Sinn Féin

The Member’s time is up.

Photo of George Robinson George Robinson DUP

I am struck by the variation in petrol prices in Northern Ireland, never mind throughout the United Kingdom. At times, I have seen differences of 15p a litre in Northern Ireland while on my journey to the House, and I ask myself why. I also ask myself why the major oil companies are allowed to accumulate such massive profits and why the Westminster Government and Treasury charge such a disproportionate amount of tax on fuel, the equivalent of 60%.

It is obvious that the major supermarkets keep prices low to ensure that they stay competitive, but, at times, even that produces widely varying prices from the same retailers, depending on the area of Northern Ireland. Therefore, it is not a huge surprise that some people seek to capitalise on high fuel prices by smuggling and fuel laundering. I am also acutely aware that, at times, it is advantageous for private motorists and businesses in Northern Ireland to buy their fuel in the Republic. I have heard of people driving across the border with a boot full of jerrycans to fill them and their vehicles with fuel. All that results in a net loss of funds to the Treasury, and given that around 70p per litre goes into its coffers, that is a significant loss of revenue.

In some ways, we cannot blame motorists for trying to acquire cheaper fuel. High fuel prices hit us in Northern Ireland harder because of our reliance on moving our goods by road — this is after the goods’ journey to get here either by air or sea. The May 2010 AA fuel price report shows that Northern Ireland has the highest fuel prices in the United Kingdom. I am also concerned that the dearest fuel is in some rural areas, the very areas where people are more heavily reliant on their vehicles because of the lack of public transport.

It would be beneficial if the level of taxation that is applied on fuel in Northern Ireland were looked at by the Treasury and the outcome reported to the Assembly and the Executive for further consideration and debate. I support the motion.

Photo of Leslie Cree Leslie Cree UUP

I am pleased that we can discuss the issue of fuel prices in Northern Ireland and the impact that they have on the daily lives of our constituents, both domestic and in business. The motion covers the price at the petrol and diesel pumps and the price of home heating oil. I assume that it also applies to electricity and gas, but they are both subject to regulation.

Wherever I go in my constituency, the same issue comes up time and time again: putting fuel in our cars and oil tanks is getting more costly. However, there is much a more serious issue than making small changes to our daily lifestyle — some people in Northern Ireland now have to choose between food and fuel.

Oil is the first choice for home heating for 72% of domestic consumers in Northern Ireland. This winter was the coldest in decades, and although we have benefited from warm weather of late, the fact remains that the rate of fuel poverty in Northern Ireland is almost three times that of England and over one third more than that which obtains in Scotland and Wales.

Northern Ireland is heavily reliant on private cars for transportation, particularly in rural areas where the public transport system is more limited than in cities. Some 77% of households in Northern Ireland have access to a vehicle, and three quarters of people in Northern Ireland travel by car at least three times a week. Between May 2009 and May 2010, the price of filling a tank of petrol went up by £12 and the cost of a tank of diesel went up by £10·57. That is a staggering increase, which hits hard at household budgets. However, it appears that consumers in Northern Ireland are experiencing more pain than those in other parts of the United Kingdom, and only some of that may be due to increased transportation costs to Northern Ireland.

I am also disappointed by the local variances across Northern Ireland, which, in some places, can amount to a difference of 11p. The previous Member to speak mentioned that. It is of great concern, and I call on local petrol stations to price in an equitable manner that is fair to, and respectful of, the consumer.

International markets, by their nature, are difficult to regulate, and that is not the role of the state. It is my understanding that there has been a growing trend of speculative buying and selling in the marketplace, which has increased the cost of fuel well above the cost of production. The Government also receive significant revenue from the duty and tax on fuel; it is a tax on a tax. Government duty and tax account for more than 60% of the final cost to consumers.

Since 2008, the Conservative Party has advocated a fuel stabiliser. Indeed, the fuel stabiliser was a Conservative Party manifesto commitment. Such a measure would cut fuel duty when oil prices rise and vice versa. It would ensure that businesses and homes are less exposed to volatile oil markets and would create a more stable environment for low-carbon investment. That is entirely the sort of measure that would be of benefit to the consumer and would provide a longer-term cushion.

The Consumer Council’s website offers an excellent resource to the consumer whereby you can click on where you live to find out the price of fuel in your area on a weekly basis. I advise all consumers in Northern Ireland to avail themselves of that valuable resource. It is most interesting.

Last month, it was recorded that Northern Ireland had the highest price of petrol and diesel in the whole of the United Kingdom. A more strategic approach to energy in Northern Ireland is needed in the longer term. There is a distinct need to promote and develop energy efficiency for our homes and businesses. The warm homes scheme is useful in improving loft insulation and cavity wall insulation, in addition to a number of other heating measures. We have been saying for years that such measures help, but a great number of houses still lack such insulation.

(Mr Deputy Speaker [Mr Dallat] in the Chair)

We also need to plan for the future. We need to invest in alternative energy sources, and in the longer term, we need to restructure the entire infrastructure of energy provision in Northern Ireland. The Minister of Enterprise, Trade and Investment needs to commit more resources so that Northern Ireland takes the lead on alternative energy in the United Kingdom. I support the motion.

Photo of Alban Maginness Alban Maginness Social Democratic and Labour Party

Although the Committee is interested in fuel and fuel prices, it has not taken a basic position on the regulation of fuel prices. That is a matter for discussion, not just during this Assembly debate but in the Committee at a future date.

I thank the proposer of the motion for raising this important issue. It is a timely motion, and it reflects our overdependence on oil in particular. The price of petrol, diesel and home heating oil has adversely affected Northern Ireland more than other parts of these islands. It is a matter of grave concern to our constituents, 70% of whom rely on home heating oil as their basic source of heat. There is a tremendous dependence on oil in this region.

We have to draw lessons from that, first by seeking ways of reducing that overdependence. As Mr Cree rightly pointed out, we should urge the Department of Enterprise, Trade and Investment to provide renewable energy sources as alternatives to oil. That is a very important message not only to the Department of Enterprise, Trade and Investment but to the Administration. It is something to which the whole Government should address their mind. That is a medium- or long-term solution to our problem. The immediate problem is the high pricing of petrol and home heating oil: at least 60% of the price of petrol and diesel is due to VAT or excise duty on fuel. The grave volatility in the wholesale price of crude oil in the international markets is an unsustainable and intolerable situation for the ordinary consumer. Since Government accounts for 60% of that price, they are imposing a substantial burden on the ordinary consumer. They have to address that.

Mr Cree referred to a proposition to have a fuel stabiliser. That is an important contribution to the debate. We should be seeking reassurance from the Government at Westminster, which has ultimate control over taxes and fiscal policy, that a fuel stabiliser should be introduced to keep prices stable. That is a sensible proposal. It is needed in this region in particular, because we have at least marginally higher prices than other parts of the UK, and we have a higher price than that enjoyed in the Irish Republic. It is important that we tell the Westminster Government that we have a special concern about fuel prices and urge them to introduce a fuel stabiliser.

The Northern Ireland Consumer Council does a very good job as a watchdog on fuel prices. It should be commended for its tremendous work for the consumer.

Photo of Séan Neeson Séan Neeson Alliance

I welcome the opportunity to debate the topic, and, of course, I will be supporting the motion. Bearing in mind the release of a report today on energy brokering, the timing could not be better. The report was prepared by the Housing Executive, the Consumer Council and Bryson Charitable Group and contains some very good suggestions. It gives examples of how significant reductions in costs can be provided for consumers by bulk buying, not only in the UK but in other parts of Europe.

It gives examples not only from the UK but from other parts of Europe. It is worth considering that document to see how we can learn from people who live in other countries.

According to the AA’s monthly fuel report for May 2010, Northern Ireland has the highest price for unleaded petrol at 122·1p a litre, compared with the national average of 121·5p a litre. Northern Ireland also has the highest cost for super-unleaded petrol at 129·4p a litre, compared with the national average of 128·6p a litre. For diesel, the cost is 123·7p a litre, compared with the national average of 122·9p a litre.

The Committee Chairman referred to the excellent work of the Consumer Council. In its May 2010 report, the council found that there are actually large variations in petrol prices between towns in Northern Ireland. In places such as Bangor and Coleraine, the cheapest price for unleaded petrol is 115·9p a litre. However, in places such as Strabane, it is 126p a litre, while in Derry, it is 120·9p a litre.

There can also be variations in each town. In some towns, there are differences of up to 4p a litre. The cheapest price in Londonderry is 120·9p a litre, and the most expensive price is 124·9p a litre. Therefore, the council recommends that consumers always keep an eye on their petrol gauges so that they can get to the cheapest filling station in their towns rather than having to panic buy at the nearest one when they are about to run out of petrol. Shopping around can save a great deal of money over time.

The Consumer Council also estimated that in May 2009, it cost £48·79 to fill a car with petrol. However, in May 2010, that had increased by £12. During the same period, the cost to fill a tank with diesel had increased from £50·99 by more than £10. Obviously, Government duty plays a major part in that because it accounts for 60% of the price of a litre of petrol. There are growing demands from some quarters that the Westminster Government reduce that duty to help out hard-pressed taxpayers. Therefore, the Government are the big beneficiary of those fuel prices.

According to the Northern Ireland Oil Federation, there are several ways that consumers can cut down the costs of home heating oil to ensure that they are not hit for large sums in the depths of winter. One way is to plan ahead and to buy oil when it is cheapest, which is during the summer. Consumers can make savings of up to £60 on December prices if they buy oil in July or August.

Home insulation is another big issue that is connected to home heating oil. Home builders have a responsibility to take into account the best ways to reduce costs for consumers. Earlier, I mentioned the lack of regulation for home heating oil. Certainly, there is a strong case for proper regulation for house coal and bottled gas. I know that a large number of people throughout Northern Ireland use coal and bottled gas to heat their homes.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin 5:00, 7 June 2010

Go raibh maith agat, a LeasCheann Comhairle. In supporting the motion, I assert my view that the Assembly, in dealing with the issue of fuel prices, must be guided by the consideration of three principles. Of course, the Assembly does not have total devolved authority on the matter, which means that engagement with Westminster, particularly the Treasury authorities, will clearly be involved. One principle is the diversity of energy supply, which colleagues from different parties addressed; competition in energy costs is the second; the third is regulation to protect consumers’ interests, particularly if there are strong concerns about profiteering.

Sinn Féin has called for initiatives on the bulk buying of oil and gas to achieve cost savings on behalf of consumers. Although we welcome the opening up of the energy market, which allows Firmus to compete directly with Phoenix, we are concerned that pay-as-you-go households will not have access to guaranteed cheaper fuel because of the failure to put in place the necessary switching systems. I know that they are being put in place, but it is regrettable, since the issue was addressed some 18 months ago — not only by the parties present in the Chamber but by the industry itself — that the regulator has yet to come forward with the mechanism to allow that to happen.

We need to maximise whatever control or influence we have to bring about diversity of fuel supply and regulation across the board. I agree with Sean Neeson. The fact is that, apart from electricity, energy supplies are not regulated in the same direct fashion. It would be useful to ask for some indication through the Committees, particularly the Committee for Enterprise, Trade and Investment, of the regulator’s views on the expansion of his role and remit.

Given our housing stock, there are various straitjackets on people’s ability to follow the market or to avail of opportunities for cost savings: sometimes houses have not been adapted; sometimes residents rely on solid-fuel open-fire appliances to heat their homes. Although gas might provide an advantage over oil, people may not have the wherewithal to convert to it or to take advantage of it. Such issues can only be addressed strategically to alleviate the fuel poverty that affects so many in our community.

Parties have demonstrated that fuel prices is an issue that they would like to see addressed. The fact that the Assembly does not have total autonomy in that area should be an incentive for us to seek those additional powers and, if necessary, to engage in negotiations to allow, in that specific sectoral area, greater flexibility in how the Assembly responds to the pressure from our constituencies. Each and every party has experience of the issue and has had to deal with it in its constituency services.

I know from personal experience that, given the difference in price in petrol and diesel, many — including well-known unionist politicians — travelled to filling stations on the other side of the border. It made sense. At one stage, the difference was such that every third fill-up was virtually free.

Photo of John Dallat John Dallat Social Democratic and Labour Party

The Member should bring his remarks to a close.

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

It made sense. I am not making a political point [Interruption.]

Photo of Mitchel McLaughlin Mitchel McLaughlin Sinn Féin

The logic is that we continue to look at island-wide opportunities for synergy and harmonisation. I think that unionists have demonstrated that flexibility. Follow through.

Photo of Danny Kennedy Danny Kennedy UUP

I want to express my broad sympathy with any motion that draws attention to the impediment that high fuel prices impose on the Northern Ireland economy and on individual motorists. The motion specifies action for the First Minister and the deputy First Minister and for the Minister of Enterprise, Trade and Investment.

In 2008, the now Chancellor of the Exchequer, George Osborne, first announced Conservative plans for a fuel duty stabiliser. The idea was rather simple: when oil prices are high, the fuel duty will be lowered, and vice versa, to keep prices stable and to protect motorists. In April 2010, ‘The Daily Telegraph’ estimated that, with current pump prices at a then all-time high of £1·20 a litre, the Conservative plan would probably have reduced the price of petrol at the pump by as much as 10p a litre. The new Conservative Secretary of State for Transport, Mr Philip Hammond, has vowed to end what he called the previous Government’s war against the motorist, and, since taking office, he has confirmed his intention to introduce the fuel price stabiliser pledge that was made before the election. I think that we all welcome that.

A report published by the University of Ulster in December 2009 warned that fuel poverty is expected to increase in Northern Ireland as improvements in energy efficiency are negated by increasing fuel costs. People in Northern Ireland suffer from much higher fuel poverty than those in other parts of the United Kingdom. In fact, fuel poverty here is three times as high as it is in England. That stems from a number of factors, such as low income, energy-inefficient households and expensive fuel costs. All those factors must be addressed collectively rather than individually. Fuel poverty can have serious implications on the health and well-being of certain groups in society, particularly the elderly, children and people living with chronic illness. Fuel poverty deeply affects Northern Ireland, and we need to find a long-term solution to it.

The issue is about more than simply the price of fuel. We need to make homes more energy efficient. Schemes such as the warm homes scheme are critical to countering fuel poverty. We also need to become more open to sourcing energy from renewable and sustainable sources that are not affected by the international markets to the same extent as oil is. Energy will always be a vital commodity. Therefore, Northern Ireland must learn to harness local resources. We must increase people’s awareness and shift the emphasis on to developing renewable energy. The speculative buying and selling of oil in the world’s commodity markets, which has the overall effect of pushing up prices, is outside the control of the Assembly and sometimes of the national Government.

If the difference in fuel prices across Northern Ireland is addressed, that may yield some local results. Coming from south Armagh, I sometimes worry that it has become the diesel laundering capital. Indeed, it sometimes appears that there is more diesel and oil in south Armagh than there is in Iraq. I am concerned that diesel laundering has forced many legitimate operators out of business and encouraged a reliance on the black market and the black economy. We, therefore, need to ensure that we address those issues. Even the Members who tabled the motion must accept that there was and may yet be a link between illegal operators in areas such as south Armagh and republican paramilitaries. We must be honest enough to admit and address that. I broadly support and commend the motion.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Chief Whip, Shadow SDLP Spokesperson (Culture, Media and Sport), Shadow SDLP Spokesperson (Business, Innoviation and Skills), Shadow SDLP Spokesperson (Health)

I, too, welcome the motion and commend the Members who tabled it. The issue has been with us for a number of years. Sometimes it eases a bit; sometimes it gets worse. The great difficulty is that fuel prices are on an ever upward spiral.

I tried to amend the motion to include specific mention of the appointment of a fuel regulator or tsar. Unfortunately, that amendment was not accepted. However, the tone of the debate so far is in sync with my call for a tsar, and, therefore, I do not feel that there will be any resolution to our fuel problems until someone is in place with the authority to deal with those. Whether he or she takes that authority from the Westminster Parliament or from this Assembly is not really relevant. We need somebody to stand up for the consumer on the price of fuel. Although the Consumer Council does quite a bit, we need somebody with much heavier clout.

The immediate economic effect of rising fuel prices is that transport costs go up, which affects everybody, including the private and public sectors and the health and education sectors. For example, ambulances burn fuel, and fuel is required to meet the Health Service’s other transport needs, just as it is required to run school buses and school support services.

In the time afforded to me, I want to concentrate briefly on fuel poverty. It is the biggest scandal of all that in the world in which we live, with all its levels of sophistication, people are living in fuel poverty. No one specific factor leads to fuel poverty. However, the climate and lower household income in this part of the world add to it. High energy prices and poor energy efficiency are also major contributory factors. In 2006, it was estimated that one in three households, which is around 35% of households or 343,000 households, were forced to live in fuel poverty. Given the recent steady rise in fuel prices, allied with rising unemployment and a lack of money, it is expected that up to 50% of households could now be experiencing a degree of fuel poverty. The most vulnerable groups are the elderly, disabled people, those living with a long-term illness, or families with at least one child under the age of 16.

If we are to seriously tackle fuel poverty, we must look critically at pricing mechanisms and at how and why fuel prices in Northern Ireland are much higher than those in Britain or the Republic of Ireland. It is quite clear that, as consumers, we are being disadvantaged through pricing mechanisms and the tax regime. There can be no doubt that fuel companies and, in particular, oil companies, charge as much as they can get away with. On the taxation side, the Government try to charge as much as they can get away with. Other Members have said that more than 60% of the cost of diesel, petrol and other oil goes on duty, and I have seen figures that suggest that the duty is almost 70%. However, it is in the same ballpark, and it means that it costs me perhaps £60 to fill my car with petrol, of which the Government will directly take £40 to £41, with only £19 or £20 going on oil.

We cannot throw the full burden of blame at the oil companies. The Government have to do something about stabilisation and, when prices go up, levelling the duty. However, the latest duty increases implemented by the Government have seen yet a further rise in price, and I am quite sure that this Government will top that up again. On top of the price of fuel, the duty and the tax are crippling the public sector, such as the Ambulance Service and the Fire and Rescue Service, the business community and those involved in haulage and transport.

Photo of Alasdair McDonnell Alasdair McDonnell Shadow SDLP Chief Whip, Shadow SDLP Spokesperson (Culture, Media and Sport), Shadow SDLP Spokesperson (Business, Innoviation and Skills), Shadow SDLP Spokesperson (Health)

All that runs counter to government efforts to get us out of the recession. I fully support the motion and add my call for a regulator or fuel tsar to monitor and hold the fuel and oil industries to account.

Photo of Martina Anderson Martina Anderson Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I greatly appreciate the opportunity to speak in this debate on an issue that affects everyone on this island. We are currently facing a record peak in oil prices, which is placing a huge burden on domestic and business users alike.

Last week, the Consumer Council revealed that in May 2009 it cost £48·78p to fill a 50-litre tank with petrol and £50·99p to fill it with diesel. However, as my colleague Jennifer McCann said, at the beginning of May 2010 it is £12 more expensive to fill a 50-litre tank with petrol and £10·57p more expensive to fill it with diesel.

As a representative for Foyle — I have not said “Standing up for Derry” for a while — I want to make particular reference to the statistics revealed by the Consumer Council in April that showed that Derry was the most expensive place in the North to buy petrol. That is not whingeing, that is a fact; and it is the second most expensive — [Interruption.] — you may laugh, but it is no joke — place to buy home heating oil. We in the North have more winter deaths than Sweden and Germany, where it gets really cold, and I suspect that a disproportionate number of those deaths take place in the north-west, particularly in the city of Derry.

As the motion suggests, there is a huge disparity between what people in the North of Ireland pay at the pumps compared with those in other parts of the island. For example, petrol is almost 6p a litre more expensive in the North than in the South; diesel is more than 15p per litre more expensive. Such price increases impact significantly on hard-working families and businesses of all sizes. They particularly affect those living in rural areas who have no transport alternative except the private car.

Given that 60% of that price is Government taxes, surely steps should be taken to harmonise the price of fuel on the island of Ireland. We should, as was suggested, pursue the idea of a regulator or commissioner to hold those people to account, because what they are getting away with is a scandal.

We recently saw the benefits that an all-Ireland energy market can bring in lower electricity costs as a result of Airtricity entering the market here. We need to show a similar all-Ireland approach to the fuel market and look at progressive ways of harmonising costs across the island, because that makes economic sense.

Of course, that must be coupled with reducing our dependence on the car and increasing the numbers using public transport. Increased demand for car travel will continue to force up the price of fuel. That is a fact. Therefore, Government and public transport providers must focus on improving the coverage, cost and choice of services; alternative sources of fuel should also be explored. The University of Ulster is doing much good work on the possibility of creating a hydrogen highway on the island of Ireland. However, that is for the long term.

What is needed now are direct discussions between fuel suppliers and the Belfast, Dublin and London Administrations with a view to reducing the burden on the consumer here. With the political will, such discussions and programmes of action could emanate from the British-Irish Council and the North/South Ministerial Council.

Pressure must also be maintained on energy companies to introduce social tariffs, which were suggested as a means of reducing fuel bills for vulnerable consumers. Fuel poverty in the North is estimated to be at 40%, compared with 12% in England, 23% in Scotland, and 21% in Wales. Despite that, social tariffs were introduced in England, Scotland and Wales five years ago to compel energy companies to redirect a percentage of their vast profits to reduce bills for the most vulnerable households. It is scandalous that social tariffs were introduced in England, Scotland and Wales, where fuel poverty is only a fraction of what it is here, yet similar steps have not been taken in the North of Ireland.

I welcome the fact that all those who spoke in the debate supported the motion.

Photo of John Dallat John Dallat Social Democratic and Labour Party

Bring your remarks to a close, please.

Photo of Martina Anderson Martina Anderson Sinn Féin

However, it is an absolute shame that no Minister is here to respond to the debate.

Photo of Gerry McHugh Gerry McHugh Independent

Go raibh maith agat, a LeasCheann Comhairle. I will restrict my remarks largely to the issue of petrol prices. There has been an increase of as much as 20p in recent months from almost £1 a litre at one point. That goes to show that some people can raise prices for consumers whenever they wish.

The price of petrol in Northern Ireland is roughly 122p a litre; in Yorkshire, it is 120·7p; in south east England, it is 122·1p; and the UK average is 121p. There is a difference of six pence between the prices here and those in the South of Ireland. There is an upward trend in prices all the time, which is what really annoys the public.

There has been a decline in the number of fuel retailers. In 1992, there were 18,000 in the UK, whereas in 2008, there were 9,264. That represents an average of 450 closures a year. In the North, there are 550 fuel-selling retailers. Four per cent of those retailers are large supermarkets, including ASDA, Tesco and Sainsbury’s — approximately 22. Those supermarkets hold 24% of the market, which accounts for 132 stores.

Large supermarkets hold the most control over pricing here. For example, in the same week, Sainsbury’s priced petrol at 117p a litre in its Coleraine outlet and at 121p a litre in its Craigavon outlet. Large supermarkets can buy fuel in bulk, and they are able to hold larger volumes of fuel and sell the fuel in a shorter space of time.

The total volume of fuel sold by service stations in rural areas is low and entails a cost penalty due to the distance travelled from the refinery or terminal. The cost penalty is incurred at rural sites, because they require frequent deliveries, sometimes of less than full loads. In addition, the loss of Morrisons has removed some of the competition.

Sixty-seven per cent of the cost of fuel is due to Government duties and tax, which affects every region. The difference between duty and tax in Britain and the Republic of Ireland accounts for most of the price difference between the Six Counties and the Republic. Another reason for the high price of fuel is the natural volatility of fuel markets. As a result, small retailers are forced to buy high-cost fuel. Although large supermarkets can afford to sell fuel cheap due to high demand, smaller retailers cannot afford to sell at lower prices, which means that, in some areas, supermarkets can keep prices high and do not pass on cheaper fuel prices to consumers.

There is an increasing cost incurred by complying with regulations in environmental legislation, which includes changes and updates in tanks, lines and pumps. Smaller retailers struggle to justify the capital expenditure based on projected turnover and profitability levels.

That fuel in Northern Ireland is only six pence more expensive than it is in GB is down to supermarkets and the nature of the fuel market, the competition and transport costs. The solution is to peg fuel excise rates to those in the South of Ireland, as that accounts for the vast majority of the price difference. I know that some people will not agree with that.

Photo of Danny Kennedy Danny Kennedy UUP

No, naturally.

Photo of Gerry McHugh Gerry McHugh Independent

Naturally.

The vital issue for us all is impact on the overall economy, and I agree with a lot of the comments that were made about that. There is also an impact on the poor and the elderly. Sometimes, those people live in the cold and switch off the heat altogether. That is becoming more common. Many of those consumers live in Housing Executive properties and do not have a choice about how they heat their homes; it was imposed on them. Those people do not even have the option of buying small amounts of fuel.

Regulation was mentioned, and maybe the price of small amounts of fuel needs to be regulated as well, because people who buy such quantities are fleeced and charged up to three times what they should be.

During the Enterprise Committee’s visit to Europe, members saw that we, as a local area, need to be moving in the direction of renewable energy. Go raibh maith agat.

Photo of Gerry Adams Gerry Adams Sinn Féin 5:30, 7 June 2010

Tá mé fíor-bhuíoch de mo chairde as an rún seo a chur síos.

I support the motion. High fuel prices have a direct and adverse effect on jobs, food prices, transport costs, domestic and business costs and families. As we have heard, wage levels here are lower than those elsewhere in these islands, and there are greater levels of poverty. That means that fuel poverty is a significant problem for many people, particularly those who are elderly, have young families or who are sick or suffering significant hardship.

A case in point is that of cancer patients. Recent research by Macmillan Cancer Support revealed that cancer patients who are receiving treatment are twice as likely to fall into fuel poverty than those who do not have the disease. However, nothing is being done to help them. There is no onus on gas and electricity companies to provide a cheaper tariff for those patients, nor do they provide a cheaper tariff for those on low incomes.

The Assembly needs to ensure that social tariffs are introduced to compel energy companies to redirect some of their vast profits towards reducing bills for those who are least able to pay. Even in these difficult economic times, fuel and energy companies continue to make enormous profits. Therefore, every effort must be made to utilise existing resources better, to examine what practical measures are open to the Executive and Departments and to talk directly to the British and Irish Governments about how they can help.

A small example is the way in which, within our own governance, winter fuel payments are distributed. That annual payment amounts to between £125 and £400 to everyone over 60 to help with fuel bills. However, it is not means-tested; it is paid to everyone over that age irrespective of their income. It is even paid to those who have retired to live in other countries. Why should the very well-off receive the winter fuel payment when cancer patients, who, because of the effects of their treatment often need to use more fuel to stay warm, receive nothing? It is a very important issue. I thank my friends for proposing the motion. Go raibh míle maith agat.

Photo of Paul Butler Paul Butler Sinn Féin

Go raibh maith agat, a LeasCheann Comhairle. I thank everyone who contributed to the debate. I sense that there is consensus and I hope that the House will not divide on the matter.

Although the motion dealt primarily with petrol and diesel prices at filling stations across the country, fuel poverty was raised as was the difference in pricing between the two jurisdictions on the island and how fuel is cheaper in the South than in the North. The cost to businesses was also mentioned; Members will recall that the Utility Regulator recently carried out a review of the high cost of electricity to businesses. It was pointed out during the debate that the price of home heating oil is not regulated in the North.

I will go into some Members’ contributions in more detail. Renewable energy was mentioned, as was our dependence on electricity and petrol, and fossil fuels such as gas, to heat our homes and use in our transport systems. The Enterprise, Trade and Investment Committee recently visited some renewable energy projects in Europe to see how we could implement similar schemes in the North and on the island of Ireland and reduce dependence on fossil fuels.

Positive signals are coming from the single energy market. It is hoped that Airtricity will enter the electricity market.

There are claims that it is going to offer 10% to 15% reductions to the charges levied by NIE. Members mentioned people switching suppliers and the fact that pay-as-you-go gas customers cannot switch as readily as others. There appears to be a consensus on this issue. MLAs are being confronted with these problems on a daily basis, but we do not have much control over fuel prices.

Jennifer McCann mentioned the AA report when she moved the motion. That states that we pay some of the highest prices for unleaded petrol and diesel on these islands. She quite rightly mentioned taxation, exchange rates and the wholesale price of crude oil and how that impacts here in the North. She also mentioned fuel poverty and its impact on families.

George Robinson made a good point about the variation of prices across the North. As Martina Anderson said, Derry seems to be getting the worst of that because of the high prices there. Sean Neeson said that the Consumer Council has a good website that enables people to shop around to try to get the best prices. I am not too sure that driving from Derry to Belfast to get fuel would work out cheaper. However, things can be done to try to minimise costs as much as possible.

Leslie Cree mentioned people having to make a choice as to whether they pay for fuel for their cars, heat their homes or put food on the table. All MLAs will have heard of such experiences. We have spoken in the Committee for Enterprise, Trade and Investment about trying to get a focus on renewable energy and wean ourselves off the dependency on fossil fuels. Alban Maginness, the Chairperson of that Committee, also mentioned renewable energy and said that we should look at ways of finding alternative sources of energy for our homes, businesses and transport.

Some Members, including Leslie Cree and Alban Maginness, mentioned the fuel stabiliser that the new Tory/Lib Dem Government talked about. I think it was Danny Kennedy who mentioned the fact that there are moves afoot to action that. We will wait and see how that will impact on us.

I was at the launch of the energy brokering report in the Long Gallery today, as was Sean Neeson. The report has some good examples of how, for example, local councils are trying to get people who use home heating oil to use savings stamps schemes. Jennifer mentioned brokering schemes to bulk-buy fuel for whole estates. Therefore, actions, which would not take a lot of money to implement, can be taken. The Executive and Assembly should back those ideas.

Mitchel McLaughlin spoke about the supply of fuel, competition and the question of bulk-buying. As he said, the reality is that the Assembly does not have much control over fuel prices; those agreements are very much made in the private sector. We need to have more regulation around fuel. Alasdair McDonnell also referred to the need for regulators, especially for the oil industry. We have that for electricity and gas, but there is no regulation of diesel, petrol, home-heating oil, coal or bottled gas.

The motion calls for the First Minister and deputy First Minister, along with the Minister of Enterprise, Trade and Investment

Photo of Danny Kennedy Danny Kennedy UUP

I am grateful to the Member for giving way. I am interested in his winding-up speech, the end of which he appears to be approaching. However, he has not dealt with the point that I attempted to raise about the large number of rogue fuel operators — coming from south Armagh, I speak from experience — whose proceeds, in part at least, help to fund paramilitary organisations. Is that the elephant in the room of which no one dare speak? Does the Member have any thoughts on how that significant issue might be addressed?

Photo of Paul Butler Paul Butler Sinn Féin

I do not think that the motion is about that issue. When there is a border in Ireland, people will always exploit it, either legitimately or illegally.

Photo of Danny Kennedy Danny Kennedy UUP

Therefore, it does not matter?

Photo of Paul Butler Paul Butler Sinn Féin

The motion is not about that. It is about what the Executive can do about the fuel prices that people pay at petrol stations right across the North of Ireland.

Photo of Danny Kennedy Danny Kennedy UUP

Therefore, the Minister of Justice has no role to play?

Photo of Paul Butler Paul Butler Sinn Féin

It is not about that. That is just a distraction from the whole issue. We have had a good debate, and it is wrong to make a political point by suggesting that republicans are, or were, involved somehow. It has been going on — [Interruption.]

Photo of William Hay William Hay Speaker

Order. I ask that the debate be conducted through the Chair.

Photo of Paul Butler Paul Butler Sinn Féin

The Member made some good points. I do not know whether he is one of the unionist MLAs who, as my colleague Mitchel McLaughlin mentioned, go across the border to avail themselves of the cheaper prices in the Twenty-six Counties. Perhaps he is, and that is legitimate business.

Gerry McHugh referred to the decline in the number of retailers that sell fuel, and that has not done anything for competition or supermarket prices. Towards the end of the debate, Gerry Adams mentioned that cancer patients, for example, have to deal with high fuel prices on top of all the other costs that they face. He also said that winter fuel payments are available to everyone over the age of 60 and that some people get those payments even though they do not live in Ireland. Winter fuel payments should be means-tested so that we help the people who are in most need, such as cancer patients.

All in all, we have had a good debate, and the House should pass the motion. I hope that the First Minister, the deputy First Minister and the Minister of Enterprise, Trade and Investment will follow up on it so that something realistic is done.

Question put and agreed to.

Resolved:

That this Assembly expresses concern that our fuel prices are higher than in Britain and the Irish Republic; and calls on the First Minister and deputy First Minister and the Minister of Enterprise, Trade and Investment to open up discussions with the major fuel suppliers and the British Treasury to ensure that consumers are not being treated unfairly in terms of pricing mechanisms and taxation.

Adjourned at 5.43 pm.