George Osborne has fired a warning shot at the UK’s energy companies, fuel retailers and airlines, urging them to pass on the sharp fall in oil prices to UK consumers. A barrel of Brent crude oil fell below $50 for the first time since May 2009 on Wednesday and City analysts said it could fall to $40 in the short term. Here is a chart tracking oil prices against petrol prices.
George Osborne has waded into the debate on falling oil prices, pressing companies in related industries to pass on the falls to UK consumers.
He has chosen his moment well, with the cost of living expected to be one of the main battlegrounds in the run up to May’s general election.
As the chart above shows, fluctuations in the price of Brent crude oil over the past six years have been broadly reflected in UK petrol prices, but not as sharply.
The RAC motoring organisation has pointed out that tax accounts for more than 60% of the cost of a litre of fuel and goes directly to the Treasury.
With economists predicting a prolonged period of relatively low oil prices, the Treasury aims to investigate why a bigger proportion of the drop in prices is not being passed on at the petrol pumps, through lower air fares, and lower energy bills.
Tom Lyon at uSwitch.com said: “It’s only right that consumers should benefit from lower wholesale energy costs. Whilst quick to pass on rising costs, the big six energy suppliers are yet to reduce bills for the majority of their customers who are on standard tariffs.”