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Probe into alleged price-fixing by oil companies welcomed

  • ‘A move that could benefit Teesside’s key industries and hard pressed motorists’

Middlesbrough South and East Cleveland Labour MP, Tom Blenkinsop and Anna Turley, Labour & Co-operative candidate for Redcar, today (May 15th 2013) welcomed the news that  European Commission fraud investigators have raided the offices of leading oil companies over possible price manipulation as a move that could be a boost for Teesside’s core industries and for local motorists.

Anna said:
“We learned today that the European Commission has carried out surprise inspections at several major oil companies including Shell, BP and Statoil over possible price manipulation in breach of EU anti-trust rules

“There were concerns raised earlier this year by the Petrol Retailers Association (PRA) about an 8p increase in wholesale prices between December and February that ‘could not be explained by new geo-political issues or other economic factors’.

“I also hear that along with the PRA, big fuel users like airline easyJet have said they will provide evidence to Europe to back up their investigation. I would hope that local Teesside chemical companies can do the same.

“Obviously we have to wait for the outcome of this probe, but Labour previously warned that opaque over-the-counter deals and relying on price reporting agencies left the market vulnerable to abuse. If there has been price fixing, then this will have had a huge impact on core chemical companies on Teesside who have to use bought-in oil and gas as the core feedstock for their finished products.”

Tom said: 
“The steel industry is also a big energy user, and given the cost pressures that both Tata Steel and SSI have to face, any move that could bring down high prices that may be fixed by a cartel is doubly welcome. It could also help the motorist, like many of my East Cleveland constituents; who have to make long journeys to and from work or even to the shops. Understandably, they often feel they have been ripped off at the petrol pumps.

“This move also highlights the idleness of the present government in this matter.  In the past the government have been asked to step in to see that UK bodies like the Competition Commission intervene, but these calls were ignored. Labour tabled amendments in Parliament last year calling for commodities like oil to be part of the Financial Conduct Authority’s regulatory net, but Ministers refused to act. They must explain why they complacently failed to do so.

“The fact that Europe has been the agency to seek fairness for Teesside industry is also ironic given the hostility of many Conservative Government Ministers towards Europe. Any move to stop collusion and drive down prices can only be good for these companies who have previously been at the mercy of the energy companies.”

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