Drivers despair as oil firms make fortunes

Apr 30 2008 by Sam Wood, The Journal

THE ANGER of North East drivers and hauliers over high fuel prices was stoked last night by the news of record profits at two oil companies.

BP and Shell announced that they had made a combined profit of more than £7bn in the first three months of the year.

At the same time, in just a few weeks, fuel prices in the North East have rocketed, with the average cost of a litre of unleaded petrol up by as much as 4.5p.

The extra cost at the pumps is putting pressure on businesses and drivers at the same time as inflation and worldwide oil shortages drive up food costs.

Meanwhile, the president of Opec, the organisation of oil producing countries, warned that the current price of around $120 per barrel could rise to $200 – which could almost double petrol prices – and there was little the cartel could do about it.

Chakib Khelil, also Algeria’s energy minister, blamed the weak dollar and global political insecurity.

Newcastle hackney cab driver Terry Gorman yesterday told The Journal: “It is absolutely disgusting the amount these companies are making. We are on the brink of a recession and these companies are making this much.

“Fuel prices are pushing inflation up and up and it is putting pressure on people. Livelihoods are on the line. I have noticed the work dropping off a lot recently because people are just not going out as much at the moment.

“These companies could easily take a few pence off a litre of petrol and still make huge sums of money.”

Mr Gorman also said the Government should cut the duty on fuel.

In the wake of the announcement from BP and Shell, AA president Edmund King said: “It’s the ordinary motorist that’s bearing the brunt of this while the oil companies and the Government are laughing all the way to the bank.”

A spokesman for the Freight Transport Association said: “These companies are sitting on a fortune, thanks to high fuel prices. They should be investing in infrastructure which will help to reduce the price.”

Ross Smith, head of policy at the North East Chamber of Commerce, said: “This is an issue which is not going to go away. I would not criticise these companies for making a profit and there is plenty of competition in the market. But I would like to see them invest more to help bring the cost at the pumps down. The Government should also be doing something. They have a double whammy of benefits from high fuel prices. Not only are they getting the duty on each litre of fuel but they also receive increased VAT receipts when prices are high.”

Unite regional officer Graham Tran said: “These profits are a slap in the face for 180 staff at Shell who were told less than seven days ago that they face redundancy.

“Furthermore, both Shell and BP have announced pension holidays for 2008 at a time when our members in Grangemouth are fighting to protect their pension fund.

“Despite these huge profits there is still an unacceptable backlog of maintenance work on Shell installations in the North Sea.

“The continued failure to address this issue shows that Shell are not making the necessary investments in safety.”

A Treasury spokesman said no announcement on reduced fuel duty was imminent and any changes would be made at the next Budget.