Labour’s value of residing tsar’s very blunt warning to ‘opportunistic’ gasoline companies
The government’s new cost of living champion has called on regulators to get tough with any energy firms found “ripping off” consumers amid Middle East crisis
Pain at the pump – but how much of it is justified?(Image: ANP/Shutterstock)
Fuel firms are in the line of fire as the government’s cost of living tsar accused some of “taking the p!$$”.
Chancellor Rachel Reeves and Energy Secretary Ed Miliband are due to meet industry bosses at Downing Street on Friday to hammer home the message that they will “not tolerate” profiteering from the rising price of oil.
Richard Walker, the boss of frozen food chain Iceland and PM’s recently appointed cost of living champion, went further.
Lord Walker, who will also attend the meeting, wrote: “Some companies are taking the p!$$. Today, we’re bringing the energy companies and fuel retailers into No10 to tell them that opportunistic rip-offs will not be tolerated.
“We will also hold the regulators to account and make sure they are doing their job by pulling ever lever available to them to protect consumers.”
The nationwide average for unleaded has reached 140.15p per litre, up more than 7p since before the war began. Diesel has risen even faster, surging nearly 16p a litre to 158.23p.
It came as oil prices remained at around $100 a barrel – the first time it has settled there since August 2022 – as Iran stepped up attacks on infrastructure and shipping in the Gulf.
Mr Miliband did not rule out the government providing direct support or extending the freeze on fuel duty if the conflict continued.
He also criticised those calling on Labour to water down its net zero targets, saying: “We’ve got to have clean, homegrown power that we control. That’s the biggest long-term lesson of this crisis.”
The war has also seen mortgage rates jump amid fears of energy costs leading to higher inflation. Industry experts Moneyfacts revealed the average cost of a new five year fixed rate mortgage has now hit a near 12 month high of 5.19%.
The average two-year fix has jumped to 5.10%. To make matters worse for borrowers, the number of fixed deals on offer has crashed by 530 since the chaos caused by the conflict began.
The Bank of England is expected to keep its base rate on hold next week, when before the crisis it had been poised to announce another cut.
Meanwhile, there are fears that the energy shock could result in the UK’s already fragile economy slowing further this year – or even going into recession. Data from the Office for National Statistics showed it failed to grow at all in January – even before any impact from the war.
Oil prices are on track to have risen 10% this week despite the International Energy Agency agreeing the record release of 400 million barrels from reserves. The IEA also warned the war was creating the largest supply disruption in the history of the global oil market.
It comes as Iran steps up attacks on merchant ships in the vital Strait of Hormuz. Tehran has warned the world to get ready for oil at $200 a barrel.
Meanwhile, Russia has reportedly raked in more than £1billion from soaring oil prices to help finance its war machine in Ukraine.
Moscow is estimated to be earning up to $150million (£113million) a day from the taxes collected on Russian oil exports.
Demand has been fuelled by an effective blockade of oil shipments through the Strait of Hormuz. According to the Financial Times, Russia may have collected between $1.3billion (almost £1billion) and $1.9billion (£1.4billion) since the Middle East war erupted.
The windfall comes as President Putin continues his costly war in Ukraine. Yet Gulf state oil producers have lost billions of dollars in energy revenues since the start of the conflict.
