Companies to bear the brunt of soaring crude oil prices

A barrel of North Sea crude jumped $120 a barrel after Iran, which accounts for 11% of the world’s supply, said it had halted exports to both the UK and France.

While the Middle Eastern region doesn’t currently supply oil to the UK, the knock-on effects of the cut to France’s importation of 75,000 barrels-a-day of Iranian oil - a relatively small amount - have prompted worries over the security of future supply.

The move has been seen as an apparent pre-emptive blow against the European Union after the bloc imposed sanctions on Iran’s crucial fuel exports. They included a freeze of the country’s central bank assets and an oil embargo set to begin in July.

Iran’s oil minister Rostam Qassemi had warned earlier this month that Tehran could cut off oil exports to “hostile” European nations. The 27-nation EU accounts for about 18% of Iran’s oil exports.

The EU sanctions along with other punitive measures imposed by the US are part of Western efforts to derail Iran’s disputed nuclear programme, which the West fears is aimed at developing atomic weapons. Iran denies the charges, and says its programme is for peaceful purposes.

Oil prices were also boosted by China’s decision to increase money supply in a bid to spur lending and economic growth. China’s central bank said last week that it would lower the ratio of funds that banks must hold as reserves, a move that frees tens of billions of dollars.

The oil price also took support from hopes that Germany would sanction a bailout of Greece, a move which boosted the euro. A stronger euro makes dollar-denominated crude cost less to euro buyers.

Further gains could also be on the cards in the coming months.

Mr Robin Swann, the North Antrim Ulster Unionist Party Assemblyman and member of the Stormont Agriculture and Culture Committees, has said “urgent action is needed to tackle the soaring price of petrol and diesel”.

Assemblyman Swann, who is also North Antrim UUP Chairman, warned that if effective moves were not implemented as soon as possible. “a fuel poverty crisis of a different kind” could develop.

Mr Swann added: “The latest report from the Consumer Council identifies our Province as the most expensive place in Europe to purchase petrol or diesel.

“This is a further indictment of the Westminster Government’s failure to introduce fuel price stabilising measures to Northern Ireland.

“Over 70% of the cost of petrol and diesel consists of Excise Duty and VAT, therefore, as prices increase so too does the Exchequer’s tax take.

“The Government needs to take action to minimise the effects of increasing oil prices by freezing, or reducing the level of taxes applied to petrol and diesel.

“If Westminster lacks the courage to do this, then perhaps it should devolve further powers to the Assembly to combat this new fuel poverty crisis.”

North Antrim DUP MLA Mervyn Storey said:

“We are currently going through very difficult economic and financial times,” he said.

“One major pressure that has come on many household budgets has been the spiralling cost of fuel. This has been especially so in Northern Ireland.

“A survey of prices by the AA has shown that Northern Ireland was at the top of the list in the UK when it came to fuel costs.

“It is vital that the government takes steps to help the many hard pressed households all across Northern Ireland and throughout North Antrim at this time.

“The average price of unleaded petrol in Northern Ireland is 134.6p per litre. This compares with the UK average of 133.5p per litre.

“Government needs to act on this issue. Indeed that Consumer Council has urged the Chancellor to help customers affected by such sky rocketing fuel prices.

“On average every household in the country is paying £677 per year just on the fuel duty element of fuel alone. However for the poorest 20% of our society this amounts to a financial burden that is twice as large a proportion of their income as it is for the richest 20%.

“The result of this is that it is the poorest and most vulnerable who are most badly affected by runaway fuel prices.

“It is important that this issue is not forgotten by the Government. The DUP will continue to press for proper action.”