Blair challenges further fuel price hikes

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Tony Blair said today he failed to understand why two oil companies raised their fuel prices again at the height of the crisis caused by protestors disrupting deliveries from refineries.

Tony Blair said today he failed to understand why two oil companies raised their fuel prices again at the height of the crisis caused by protestors disrupting deliveries from refineries.

The Prime Minister pointed out that the price of crude oil had actually fallen in the past few days and said he would ask oil company executives to explain their latest price rise later today.

Esso and TotalFinaElf raised the price of a litre of unleaded petrol by 2p and diesel by 4p.

However, Shell and BP kept theirs static.

Mr Blair said: "I really can't understand the Esso action. The world oil price has actually come down in the past few days.

"I will be seeing the oil companies this afternoon to discuss what's happened with this protest and some of the lessons concerned and no doubt that will be an opportunity to discuss that [price rise] with them as well."

Mortoring organisations also attacked the price rises as "insensitive" and protesters who had earlier lifted their picket at Coryton, Essex, reinstated their blockade following news of the increases.

Mr Blair, speaking at his third consecutive news conference at Downing Street, said the majority of Britain's main fuel depots were now working normally but warned it would take days for filling station supplies to return to normal even if all protests ended now.

He again ruled out an emergency budget to cut fuel duty, but promised to listen to the concerns of protesters and said ministers would meet them if they wished.

The Prime Minister repeated his message that no Government could yield to pressure designed to bring the country grinding to a halt.

He said: "Around 12 out of the 20 main depots are now working normally. Some filling stations' emergency services depots are slowly being filled.

"Not all the protests are over. There's some way to go. It will be days before regular supplies get back to normal, even if the protests finish today."

Mr Blair praised the police and the public for their conduct during the crisis.

"I would like to thank members of the public, the vast majority of whom have acted sensibly and with great forbearance."

He went on: "Whatever the strength of feeling on the price of petrol, I do hope that over time people will carefully reflect on recent events.

"However much people may dislike paying petrol duty, there's no way that any Government of this country could or should yield to this form of protest.

"And however much the protest may be presented as merely a peaceful demonstration of concern, it's purpose was to blockade fuel supplies so that the entire country ground to a halt in order to force a change of policy by the Government. Lives have been at risk and still are at risk."

Mr Blair continued: "These tactics cannot, I hope people understand, be accepted by any democratic Government or country. If we yield on this, how long before someone else with a grievance and a cause, how long before they decide they should have the right to shut the country down in pursuit of that cause or grievance.

"Of course we will listen. Indeed as a result of listening before the last budget, we removed the fuel duty escalator and introduced certain measures both for hauliers and motorists.

"We listened when we brought in an emergency package for farmers worth around £200 million. We will carry on listening. We meet regularly representatives of hauliers and farmers. Governments must listen but Governments must also govern.

"Government must make choices in an orderly and sensible way."

Mr Blair said it was true that for the first two years of his Government, the fuel escalator was still in place and fuel prices rose as a result of duty increases.

But he reiterated that: "The vast bulk of the recent rises in petrol has been due to rises in world oil prices."

He said the Government would continue to put pressure on the petrol-producing nations' cartel Opec to bring prices down.

The Prime Minister also dismissed as "completely misleading speculation" reports that the Government stood to reap a windfall duty bonanza because of price increases.

He said any extra revenue to the Government would not be enough to fund "a fraction" of a 1p cut in duty.

He said: "To lurch into some short-term fix with emergency budgets and alike, would not just be irresponsible, but the effect on the country's financial standing and credibility would be immediate and catastrophic.

"Budgets have to deal with all the issues of the country in the round. They have to be consistent with good public finances, they have to keep ensuring our interest rate is low and they have to provide for good public services to be invested in.

"I say to the protesters we understand you have a genuine and sincerely held grievance. Of course, we are ready and willing to discuss it with you but I hope you understand that we cannot and should not be threatened into a change of policy. Discussion and explanation of views is the right way forward.

"I say to the country, to have acted in the way we have in refusing to concede to demands made in this way, may not have been an easy thing to do in the short-term but I have no doubt at all it was and it is the right thing."

Asked directly whether ministers would meet protest leaders face to face, Mr Blair replied: "There has never been a problem with ministers meeting people.

"Ministers regularly meet people. Of course we are ready to meet and discuss with people the problems they have."

Asked whether he would order the recall of Parliament, Mr Blair said: "We keep that under review, but I think the main thing is to get the country getting back to normal."

On the latest forecourt porice rises, he said: "In respect of the oil companies, I'm not saying there should be some Office of Fair Trading inquiry, but I will discuss with them what's happened in the dispute and the way forward."

Mr Blair said he would also want to review arrangements for making sure workers in key sectors of the economy would be able to keep up their responsibilities in the face of a similar dispute.

Esso, which supplies 1,600 service stations nationwide, said in a statement: "We recognise that this may seem untimely in the light of the current disruption to fuel supplies, but we cannot ignore the impact of the increase in crude and finished product prices, which have squeezed already unsustainable margins even further."

TotalFinaElf said it had raised prices, but insisted it had nothing to do with the current fuel crisis.

A spokesman said: "On Friday the price of unleaded was 79.9p per litre on average and that went up at the weekend to 81.8p per litre for Monday. Diesel was 81.9p per litre on average on Friday and went up 4p to 85.9p per litre for Monday.

"The reason for the increase is that the price of oil has gone up in the world markets and it was not related to the fuel crisis," he said.

The price of Brent Crude has fallen from a high last week of 34.60 US dollars a barrel and was trading at 31.82 US dollars a barrel today, having opened this morning at 31.70 US dollars a barrel, according to the International Petroleum Exchange.

The RAC Foundation attacked the move as "insensitive" and said motorists would not be happy with the announcement.

Director Edmund King said: "This timing is totally insensitive. Ourselves and others have been trying to bring this dispute to an end and the fact that on the very day that we have manage to persuade protesters to give up their protests and start dialogue, Esso seem 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.

"The motoring public will not be happy about this because generally there was support that fuel prices were too high. So the fact that when the blockades are beginning to lift and the companies announce they are hitting people's wallets again, it really is a backward step."

Esso said that despite the timing, it felt it was important to continue with their normal price strategy.

"The need for the price increase should be evident, given that it is widely accepted that the petrol business requires a minimum of 4-5p per litre margin in order to remain economically viable," the statement said.

An AA spokesman said: "If what Esso are doing at the moment is putting the price up now so that when the stocks come in that's what is going to be the price at the pumps, then that's not very good public relations really.

"It was always a danger that there would be an increase in oil prices because there has been massive disruption to the supply chain and the oil companies will have incurred extra losses.

"Motorists will be unimpressed, but what can you do? It is an essential item. I hope it will make people more selective about where they patronise," he added.

Oil company Shell said it would absorb any losses itself.

A spokesman said: "We have made a definite decision that we are not going to put any prices up at the present time and the prices are staying at the levels they were at before the blockades began.

"In normal situations when there are increases in crude oil prices, it results in an increase on the forecourts, but in view of the special circumstances, we have decided not to implement any increases and any losses will be absorbed by Shell."

BP said it would not be raising fuel prices.

"I don't think we have put the prices up in the last two days and, whilst we are looking at the situation carefully, we have no immediate plans to raise prices," a spokesman said.