BBC Homepage World Service Education
BBC Homepagelow graphics version | feedback | help
BBC News Online
 You are in: Business
Front Page 
UK Politics 
Market Data 
Your Money 
Business Basics 
Talking Point 
In Depth 

The BBC's Russell Hayes
"The oil companies clearly feeling the pressure from the Prime Minister"
 real 56k

Thursday, 14 September, 2000, 21:13 GMT 22:13 UK
Oil giants scrap price rises
Esso petrol tanker
Esso tankers freed from blockades are carrying more expensive fuel
Three oil giants have scrapped increases in pump prices, following condemnation from the government and motorists.

Esso, the UK's largest forecourt retailer, and TotalFinaElf have reversed rises of 2p a litre to the price of unleaded petrol, and 4p to diesel.

Conoco, which owns the Jet network of petrol stations, has called off increases it was set to implement on Friday.

But while Esso and Conoco expressed regret at the timing of the rises, introduced during widespread protests over fuel costs, TotalFinaElf said market forces prompted its decision to back down.

"Regrettable timing"

The firm said its "commitment to remain competitive in the market place" inspired it to reverse rises implemented last Friday.

Esso, which raised prices on Tuesday, said: "We recognise the timing is regrettable and in the spirit of the present efforts by everyone to restore supplies... are taking steps to reduce prices."

Conoco apologised to motorists, and admitted its decision "was insensitive in the current situation".

The firms earlier on Thursday blamed the rocketing cost of crude oil for the price rises,

Margins squeezed

Esso said it could not "ignore the impact of the increase in crude oil prices, which have squeezed already unsustainable margins even further".

TotalFinaElf said: "The reason for the increase is that the price of oil has gone up in the world markets."

But the decisions prompted dismay from Tony Blair who, ahead of a meeting with oil company bosses on Thursday afternoon, said he "really could not understand" the price rises.

"The world oil price as far as I am aware has actually gone down in the last few days," Mr Blair said.

"I am not saying there should be some Office of Fair Trading inquiry, but I will discuss with them what's happened in the dispute."

Blockade resumed

News of the rises also prompted protestors who had lifted a blockade at Coryton refinery in Essex to resume their action.

"There are about 60 of us here and it has come back to the mood it was this morning before it stopped," said Andy Cox, one of the protesters, who owns a tyre-fitting business.

"We are back on permanently. So far, we have turned four or five tankers around. All this because of the anger at the Esso announcement."

RAC Foundation director Edmund King said the pump price rises were insensitive.

Bad PR

"Esso seems to be igniting the fires again with another increase. You would have thought that a company of that size could have held these increases and paid for them out of their profits," he said.

The AA described the moves by the two oil firms as "not very good public relations".

Shell and BP both said throughout Thursday that they had no plans to raise prices.

Search BBC News Online

Advanced search options
Launch console
See also:

12 Sep 00 | Business
Brown defends fuel policy
12 Sep 00 | UK Politics
'Crisis? What crisis?'
Links to more Business stories are at the foot of the page.

E-mail this story to a friend

Links to more Business stories