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Wednesday, 3 January, 2001, 22:10 GMT
Anger at 'token' petrol cut
Tesco petrol forecourt
Motorists say cuts are too little too late
Motorists groups have accused fuel retailers of "ripping off" consumers after a "token" cut in the price of petrol.

Shell and supermarkets Sainsbury's, Tesco and Morrisons have cut the price of unleaded fuel by just 1p following a rapid fall in crude oil prices in December.

The reduction has put pressure on other oil giants, including BP, Esso, Texaco and TotalFinaElf, who are holding back from announcing cuts while insisting prices would remain "competitive".

The RAC said oil companies had been slow to cut the price at the pumps and fuel protest group Dump the Pump said the 1p drop was "a token gesture".

They are profiteering and I believe the chancellor should target them with a windfall tax

Garry Russell
Dump the Pump campaigner
Ray Holloway, director of the Petrol Retailers' Association, admitted prices could have been brought down more quickly but predicted the latest cuts would be the start of a bigger fall in prices.

"I do believe that there was a cut that could have been passed on to the public before Christmas, yes," Mr Holloway told Channel 4 News.

"Others will follow, and I think to a greater degree than the 1p cut."

Petrol pump prices now stand at an average of 79.5p a litre, approximately 4p a litre higher than wholesale prices.

During September's fuel protests the monthly average crude oil price was $34 a barrel.

Sharp decline

A sharp decline in December has seen this price plummet to under $24 a barrel but forecourt prices have not followed suit.

Shadow transport minister Bernard Jenkin called on the government to cut fuel duty, saying: "During the fuel crisis Labour was always blaming the high price of crude oil for high petrol prices.

"Now that the price of crude has tumbled who does Labour blame?"

RAC spokesman Edmund King said: "Oil companies are very quick to raise prices...but very slow to actually reduce them when the world price falls.

"It's not really good enough. It's ripping off the consumer at the pumps."

Dump the Pump pressure group organiser Garry Russell said while retail margins were tight, oil companies made billions in profit on oil extraction.

Edmund King
The RAC's Edmund King: "It's not really good enough"
"They are profiteering from that and I believe the Chancellor should target them with a windfall tax.

"The token gesture of one penny on a litre here and there does not affect people's monthly fuel budgets or do much to help people like hauliers," he said.

Continent cheaper

Sainsbury's and Tesco are selling unleaded petrol at 77.8p and 78p a litre respectively - a fall of 1p - from 0000GMT.

Supermarket chain Morrisons, which claims its 82 petrol stations sell the cheapest fuel in the country, will cut petrol prices to 75.8p per litre from Thursday.

In many continental countries prices are already much lower, largely due to tax differences.

German drivers pay about 60p a litre and in Spain petrol is less than 50p.

A Tesco spokesman said local pricing policies could see cuts of more than 1p at some outlets while Sainsbury's general manager Martin Hooper said there was a prospect of further decreases if crude oil prices continued falling.

The BBC's Industry Correspondent, Stephen Evans
"Today's price cutters think the rest will follow"
See also:

03 Jan 01 | Business
02 Jan 01 | Business
23 Dec 00 | UK Politics
06 Dec 00 | Business
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