A Message from Quentin Willson: Spokesman for FairFuelUK
This isn't a good week for Government regulators. Back in September I wrote to the FSA enclosing testimony from an oil industry whistle blower who alleged that price fixing was systemic. FairFuelUK and I then met with the OFT and submitted evidence about the volatility of fuel prices and begged them to investigate oil price manipulation. Both bodies said that there was no case to answer.
I was appalled and again met with the OFT to discuss their findings. They claimed their investigation was far-reaching and they could find no case to answer. I remember being very worried at the time when they refused to show us evidence from the oil industry or give us an idea of what sort of lobbying the oil majors had done. This opacity from an independent consumer watchdog seemed unfair. Our calls for an investigation were joined by the RAC, AA and Petrol Retailers Association.
It is to this country's eternal shame that its taken European investigators to act on something that I and FairFuelUK spent months warning the Government about. I repeatedly mentioned it in blogs on this site and articles in my Sunday Mirror column, Robert Halfon MP even called for an investigation in the Commons, yet nothing was ever done. We don't yet know if these allegations of price rigging are true but a couple of very important things have to change.
Firstly we must have a truly independent and courageous watchdog to supervise the oil industry and one that is immune to multi-million pound lobbying. We also need to have serious criminal penalties for those who rig oil prices as a warning that the Government is watching their industry closely. Secondly, we need a better system of oil price reporting.
Currently the price reporting of this trillion dollar industry is overseen by a few unknown journalists and we have no idea of their standing, integrity or moral probity. That definitely isn't good enough. There are dozens of decent, honest people out there with haversacks of integrity who could stand as incorruptible supervisors of the global oil price. If the industry has nothing to hide they'd have no objections to more transparent oil price reporting.
But the most depressing outcome of all this is that, as usual, UK consumers are being treated like muppets. Lots of you wrote to me asking how the oil price spikes last year could be justified given that global consumption across the globe had fallen. How, you asked, could fuel go up in price when consumption in the UK had fallen by 20%? And you were right. The price of oil wasn't being reflected by supply and demand but by speculation, and possibly even market rigging.
And if you want to know just how serious all this could be just look at the price of oil back in 2007 prior to the financial meltdown. Brent Crude was running around $90 a barrel in 2007, yet by 2008 it had hit over $140. A $50 uplift in 12 short months couldn't just be due to increased demand and we have to draw the obvious conclusion. And its not a great leap of faith to suggest that this suspicious 50% rise in price actually accelerated to global downturn.
Nearly every US recession since WWII was preceded by an oil rice spike and I believe this was also the case in 2008. Which means that the oil industry isn't just deliberately murky and secretive, always holding its cards very close to its chest, its greed could even have payed a part in destabilising the global economy.
So let all this be a strident warning both to Governments and the oil industry. Consumers can't be treated like this and those who buy and sell the world's most important energy resource must be made much more accountable. The oil industry must drop its dark cloak of secrecy, show us all much more transparency and be criminally liable. And this isn't just about fuel for cars, vans and trucks, its about airlines, plastics, medicines, manufacturing, food, crops, gas, electricity - in fact everything that involves oil.
Its truly amazing that we've all let this hugely important industry that effects virtually everything we do dance to its own tune for so long. If the oil industry doesn't show us that they're doing fair and honest business then we must use every legal recourse we can to force them.'