So typical of a failing minister - th fuel gambit. Whenever a nice, populist and patently untrue statement is demanded, fuel prices are right up there.
It is the mark of the unthinking, publicity seeking MP to roll out this old chesnut as soon as they notice the price of oil going down. Extensive research today has revealed, exclusively to C@W, that no minister in history has ever come out to note that petrol prices are low and should go up to keep up with the market.
61% of the price is petrol is Duty - Petrol taxes and VAT. So given crude oil has fallen $30 over the last few months, which is about 30%, you would only rationally expect to see a fee through of 18% in terms of a real price impact.
DECC handily keeps the stats, so we can see what has actually happened. Brent oil has hovered for most of the year around $103 to $108, with one spike up to $115 when ISIS really kicked off. The is has dropped down to $82 today.
UK retail fuel prices matched this, at around staying between 128p and 130p for most of the year. The big dive in Brent pricing occurred in September and since then the petrol price has dropped 6p per litre, down to 122p average today. Of course, this equates, accounting for duty staying the same, to around a 10% drop.
Perhaps Danny Alexander is right and there is a 8% price gap here - petrol should around 2-3p cheaper. Of course, plain market mechanics explain this, crude oil is not petrol, it needs to be bought, shipped, cracked and distributed. This all takes around 2 months. We should be seeing further price drops in the next 2-3 weeks as the supply chain catches up. Perhaps another 2p before Christmas depending on whether the market stabilises.
Of course, Danny Alexander is a Lib Dem, famous for their election leaflets where they stand next to fixed potholes in the roads with their thumbs up, as if somehow this was their efforts on behalf of the electorate. The same is true of this, Mr Alexander knows full well prices will fall and no doubt before Christmas will make an announcement about how wise the petrol retailers were to obey his orders on this.
Shame he can't lose his safe seat at the election, eh?