Energy Secretary Ed Miliband has said the government “will not tolerate” energy firms profiteering from the rising price of oil amid the war in Iran.
Oil prices climbed back above $100 a barrel on Thursday despite the International Energy Agency (IEA) saying on Wednesday that it would release a record 400 million barrels of oil in an attempt to curb the economic impact of the US-Israel war with Iran.
The Strait of Hormuz shipping route has remained blocked as Iran has been actively targeting international cargo ships with missiles and drones, disrupting global energy trade.
The rocketing oil price has caused widespread concern in the UK over what that means for bills as pump prices have started to rise.
Miliband has not ruled out providing direct support or extending the fuel duty freeze if the conflict continued.
He and Chancellor Rachel Reeves are due to meet petrol retailers later today as they are expected to inform the sector that the Competition and Markets Authority (CMA) is on “high alert” for any unjustifiable price rises.
The watchdog warned it was putting fuel retailers “on notice” of plans to step up monitoring of petrol and diesel prices amid the war in Iran.
On Wednesday, the RAC said diesel prices had risen by nearly 9 per cent since 28 February, and petrol prices were on average 6 per cent more across the same period.
Shadow transport secretary Richard Holden said: “[Reeves] could cancel the fuel duty rise, she could cut the taxes piled on to energy, she could stop piling costs on to the price of fuel – but she isn’t doing anything because she doesn’t have the backbone.”
Net-zero targets
Miliband has also pushed back against calls to change tack on net zero, arguing the UK needed to get off the “fossil fuel rollercoaster”.
This comes as some energy companies, including Octopus founder Greg Jackson have argued that the response to the current oil price shock should be to allow further exploration and production in the North Sea.
But Miliband stated that “new exploration licences in the North Sea, which some people are calling for, will not take a penny off people’s bills.”
He said that the “right answer” for energy security and tackling climate change was the government’s current strategy: to continue producing oil and gas from existing fields, but not to permit new ones.
Miliband is launching a fast-track process on Friday for the building of new nuclear power stations, which in the past have been beset with delays, spiralling costs and red tape.
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