Middle East conflict: Petrol bosses hit out at Rachel Reeves over 'profiteering' claims
Chancellor Rachel Reeves has told petrol station bosses “to make sure price rises are limited to what is absolutely necessary and no more” with oil prices spiking due to the conflict in the Middle East.
Iran’s continued blockade of a key oil shipping route in the Strait of Hormuz as part of its retaliation for ongoing US-Israeli strikes has seen prices jump to about 100 dollars per barrel, threatening higher inflation across the world.
In a bid to curb the economic fallout, US Treasury Secretary Scott Bessent said the US was temporarily allowing “permit countries” to purchase Russian oil already in transit.
Responding, the Prime Minister’s official spokesman said: “Ultimately, it’s obviously a decision for the US, but our position is clear. All partners should maintain pressure on Russia and its war chest.”
Meanwhile, Foreign Secretary Yvette Cooper, is visiting Saudi Arabia in a show of solidarity with Gulf states targeted by Iran, said Moscow and Tehran were attempting to “hijack the global economy”.
The oil crisis has seen petrol prices at some forecourts hit £1.70 per litre, with diesel heading towards £2.
Yesterday afternoon, Ms Reeves and Energy Secretary Ed Miliband called fuel bosses into Downing Street to warn them about pricing.
At the start of the meeting, the Chancellor said she wanted to “work together to keep supply stable, to reassure the public and to make sure price rises are limited to what is absolutely necessary and no more”. Mr Miliband said that the Government “won’t tolerate” unfair practices.
Ms Reeves had previously asked the competition watchdog, the Competition and Markets Authority, to “crack down” on “rip-off” fuel prices, saying she “will not tolerate” firms exploiting the uncertainty in the Middle East for excess financial gain.
However, The Petrol Retailers Association (PRA) had threatened to pull out of the meeting, claiming this language could further incite attacks on workers.
The group eventually did take part in the meeting after assurances from the Treasury that it would be held in private, which the PRA said would “allow a conversation to explain how the fuel market works”.
The PRA’s Gordon Balmer said: “Recently, I have heard of incidents from some of our members of retail staff being abused by members of the public, who may have been provoked by the incorrect and inflammatory language emanating from some commentators, for example, the use of the terms ‘rip-offs’ and ‘profiteering’.
“Our members are working hard in difficult circumstances, making sure that motorists and businesses are getting the fuel they need, at prices that are very competitive, on razor-thin or in some cases negative margins, which means they are losing money.”
An investigation by the RAC near the start of the Ukraine invasion found that supermarkets doubled their profit margins on fuel after the war started.