Petrol Prices (Wyre Forest)

Karen Lumley Excerpts

Wednesday 12th September 2012 Westminster Hall

[Mark Garnier (Wyre Forest) (Con)]

I am pleased to see the new Under-Secretary of State for Transport, my hon. Friend the Member for Wimbledon (Stephen Hammond) in his place. He has long been a friend of Wyre Forest. Four or five years ago, when he was a shadow Transport Minister, he visited Wyre Forest to inaugurate a campaign to save a local driving test centre in the face of swingeing cuts in the number of centres under the previous Government. I am delighted that his predecessor, my hon. Friend the Member for Hemel Hempstead (Mike Penning) was instrumental in resolving that inequity, and that we will have a driving test centre as a result of the Department for Transport’s sterling work.

This debate is specifically about fuel prices in Wyre Forest, but the issue affects every rural and even semi-rural community throughout the country. The Backbench Business Committee has secured a debate on the matter in the Chamber later this week, and it could be argued that I might have done better to save this speech for that debate. I am sure that there will be a huge amount of interest in Thursday’s debate, and I am eager to use the opportunity today to put on the record my experience in trying to resolve the problems facing my constituents, and the apparent stonewalling by the fuel retailers, particularly the big chains.

The debate is about the inequity facing Wyre Forest and other rural communities. It is about how my constituents have been charged more at the pumps in Kidderminster, Stourport and Bewdley than those of hon. Members in larger urban and suburban centres. Let me put the matter into context. Since I was elected, I have been contacted regularly by constituents who have noticed that they can buy fuel at up to 6p per litre cheaper in nearby Wolverhampton, Dudley and even Bromsgrove than they can locally.

Around a year ago, I contacted the retailers asking for an explanation. I wanted to know why they saw fit to overcharge my constituents. Their reply, after cutting through the various explanations of Nectar points and price reductions depending on the contents of a shopping bag, was that prices are set locally and that that is how retailers best compete with each other. I thought that that was fair enough, but as I was eager to understand their pricing models further, I contacted local retail managers and asked to meet them to talk about fuel prices. They said, “Ah. We just collect local data and send it to regional price setters who are responsible for determining the price.” I then asked to see the regional price setters, at which point I was met with stony silence. It seems that fuel retailers are reluctant to talk about the prices they charge locally.

However—credit where credit is due—Tesco agreed to meet me, and Emma Reynolds, its Government relations guru came to see me recently to explain its strategy. She told me a great deal about the special offer on fuel prices that it has introduced, and many retailers certainly provide special fuel price offers to customers. A 50% reduction is available on Tesco fuel for those who buy a specific range of items, and all retailers have a form of offer. She also told me that the general pricing strategy of the fuel retailers—Tesco, ASDA, Sainsbury, Texaco and so on—is to compete with the lowest price within a specific radius of the petrol station concerned, and for Tesco that is 3 miles.

At this point in my speech I intended to make a few lame jokes at the expense of the petrol retailers, and to jest that perhaps “every little helps”, but the only people who are really helped are Tesco’s shareholders. However, I updated my research yesterday, and to my utter delight it seems that the pressure that I have been putting on petrol retailers locally has been heeded. As of yesterday, instead of a 6p premium in Wyre Forest by petrol retailers within a 25 mile radius, which was the situation I faced a year ago, the substantive premium is now just 1p, although there is a rogue cheap supplier at ASDA in Dudley which charges 2p less than in Wyre Forest.

[Karen Lumley (Redditch) (Con)]

I congratulate my hon. Friend on securing this important debate. He says that there is a 1p price range in our region, but will he comment on the fact that in Cardiff this morning, petrol was 3p cheaper than in Redditch?

[Mark Garnier]

I am grateful to my hon. Friend and neighbour, who is also a member of the Welsh Affairs Committee, and takes a keen interest in what happens in Wales. I will come to that anomaly between cities and smaller rural towns and semi-rural areas, which is a great problem.