Energy Secretary Ed Miliband has warned the government will step in to protect households if the war involving Iran pushes energy and fuel prices sharply higher.
Speaking to the BBC Miliband said ministers were closely monitoring global energy markets and preparing contingency plans as oil and gas prices surge.
“If it’s necessary to intervene, we will,” he said.
He added that the government was ready to support households if the conflict continued to push up costs.
“We’re going to stand by people in this crisis,” Miliband said. “We are preparing for all eventualities.”
Oil and gas prices have climbed rapidly since the outbreak of fighting raising fears the shock could feed through into household energy bills petrol prices and wider inflation.
Petrol has already risen to an 18-month high according to the RAC while heating oil costs have also climbed sharply.
The Prime Minister is expected to unveil support for households reliant on heating oil later today, particularly in rural areas where homes are not connected to the gas grid.
Miliband also left open the possibility of extending the current freeze on fuel duty which is due to end in September.
“With five months to go until September we’ll have to see where we are,” he said. “We will stand by the British people in this crisis and we will do what it takes to do that.”
Ministers have also warned fuel retailers they will not tolerate excessive pricing during the crisis.
The Competition and Markets Authority has been asked to monitor the market for signs of price gouging.
Miliband said there was already evidence that competition in the fuel market was weak.
“There is evidence this market isn’t working well,” he said. “Some of them didn’t like it but that’s tough because we’re going to fight for the British people in this conflict.”
He also pointed to problems in the heating oil market which is widely used by households not connected to the gas network.
“I don’t think these are markets that have been working well frankly,” he said. “I think there’s a longer term look that needs to be done about how these markets are working.”
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