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Brown discusses "oil shock" with industry leaders

28/05/2008

Prime minister Gordon Brown discussed what he describes as the "third great oil shock" with oil industry leaders this morning.

Downing Street staff received a petition on Tuesday signed by hauliers angry with plans to raise fuel duty by 2p this autumn, despite diesel now costing over 120p a litre.

Plans to raise vehicle excise duty on "gas-guzzling" cars announced in this year's Budget have also been met with opposition, including from environmentalists.

Senior ministers have suggested there may be policy reversals later in the year as the threat of another Labour backbench rebellion begins to emerge.

Mr Brown himself remains concerned with the wider strategic energy situation, which he argues is behind the current difficulties. He and chancellor Alistair Darling met industry leaders in Aberdeen to discuss the price surge.

Afterwards he told reporters a "better balance" between supply and demand should be established.

Writing in the Guardian newspaper, Mr Brown said: "As every country faces increased costs, it is now understood that a global shock on this scale requires global solutions.

"What we do to change the balance for the medium and long term can have an effect in the short term because it can give greater certainty about future supply and demand, and create a more stable market."

The prime minister is targeting next month's G8 summit in Japan as a key opportunity to discuss what he describes as the "third great oil shock".

He also laid out a series of short-term measures to cope with the problem, to help "families up and down the country… feeling the impact".

"Each country has also to act now to help those hit by high fuel bills," he added.

"In Britain this means increased winter fuel payments; a new one-stop service on home energy efficiency; free insulation for people on low incomes and the over-70s and a £150 million programme financed by the utility companies to cut fuel bills for lower income families."