Caroline Flint MP, Labour’s Shadow Energy and Climate Change Secretary, responding to the Government’s statement on alleged oil price fixing in the House of Commons, said:
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Thank you, Mr Speaker.
The allegations that have been made about these three oil companies – BP, Royal Dutch Shell and Statoil, as well as the price reporting agency Platts, are extremely concerning.
They suggest that these companies have both colluded in reporting distorted prices, and prevented others from participating in the price assessment process, with a view to distorting the published price.
If true, they suggest shocking behaviour in the oil market that should be dealt with strongly.
So I’d like to ask the Minister three questions.
First, the Minister will know that the OFT inquiry concluded at the end of January that the UK fuel market was operating fairly and that a competition commission inquiry was not needed.
Given the amendment that has been tabled for debate later on today, it will not be lost on hon. Members that it is the European Commission, not any British authority, that is investigating.
In light of the allegations that have been made today, can the Minister tell us whether any British authorities have plans to revisit their own investigations?
If the EU investigation does uncover any wrongdoing, it will raise serious questions about the effectiveness of our own authorities.
Second, last year, we tabled amendments in Parliament calling for commodities like oil and gas to be part of the Financial Conduct Authority’s regulatory net, but Ministers refused to act.
We argued that the regulatory perimeter needed to be explicitly set out in the Financial Services Act last year – and that it was insufficient to just add in references to LIBOR.
Does the Minister now accept that the OFT and the FCA should be explicitly equipped to tackle attempts at rigging commodities trading, whether spot trading, forward contracts, futures contracts, hedging or benchmark pricing indices?
Third, when the allegations of price fixing in the gas market were made last year, we warned that opaque over-the-counter deals and relying on price reporting agencies left the market vulnerable to abuse.
These latest allegations of price fixing in the oil market raise very similar questions.
I tabled a parliamentary question in February asking for an update on those investigations, but the Government was unable to provide any more information.
Can the Minister give us any assurance today that progress is being made, and that we will not need another EU investigation to get to the bottom of what has happened in the gas market?
LIBOR was a massive scandal.
But global commodities markets include a vast range of products – grains, fibre and other food, precious metals, energy – affecting every household.
Consumers need to know that the prices they pay for their energy or petrol are fair, transparent and not being manipulated by traders.
And I hope in his reply the Secretary of State will assure the House that no stone will be left unturned to get to establish the truth behind these allegations.