Chancellor demands cheaper petrol as Shell posts record profits Trace the rise and fall in crude prices in the last decade Graeme Wearden guardian.co.uk, Thursday October 30 2008 11.45 GMT Alistair Darling today called on oil companies to pass on lower costs to consumers by cutting petrol prices as Royal Dutch Shell posted a 71% rise in profits. The chancellor said that he wanted the recent drop in the oil price, which has halved in recent months, to be passed on to the pumps as soon as possible. "People are entitled to see the benefit of that falling price reflected in what they actually pay when they fill up the car," Darling told GMTV. Shell defied the economic gloom this morning and smashed analyst forecasts when it reported a profit of $10.9bn (£6.6bn) for the third quarter of 2008, up from $6.4bn the previous year, thanks to the earlier surge in the price of oil. The company benefited from the record oil price, which hit $147 a barrel in July before falling sharply in recent weeks. This more than made up for a 6.5% drop in the amount of oil and gas it produced, due to hurricane damage in the Gulf of Mexico. Its chief executive, Jeroen van der Veer, called the results "satisfactory" and insisted that Shell was "robust across a wide range of oil prices". "We are watching the world economic situation closely," he added. The figures come just two days after rival BP sparked a row by posting a 148% jump in profits. Unions and MPs called for a windfall tax on the oil giants, who they said had profited from speculation on the oil price. Oil was trading at around $70 a barrel today, less than half its price in July, and motoring groups have complained that this is not yet reflected in the cost of petrol. Last weekend the average price of a litre of petrol dropped back through the £1 a litre mark, down from a high of 119.7p a litre in July, following price cutting by supermarkets. But as around 70% of the cost of a litre of petrol goes to the government as duty and VAT, the drop in crude oil prices can only have a limited effect on the cost of filling up at the pump. The AA said it was important to keep pressure on suppliers and retailers, but warned that further price falls may be unlikely. "We think the supermarkets have pared their costs to the bone and are now engaged in cut-throat competition over petrol. We can't necessarily expect the rest of the industry to move as dramatically, but it will catch up," said an AA spokesman. "I do wonder if we've reached a bit of a trough for the moment, unless the supermarkets fight for Christmas trade by cutting petrol prices to try and fill the aisles." The fall in the value of sterling, which has dropped by around 25% against the dollar since July, is also undermining the benefit of lower oil prices as both crude oil and petrol are traded in dollars. Darling himself is under pressure to help motorists by scrapping the planned rise of 2p a litre in fuel duty, which has been postponed until March 2009, but the AA does not believe this is likely to happen. "The government needs all revenue it can get, so they have no option but to bring in the 2p rise next year," the AA spokesman predicted. Shell itself struck an upbeat tone today. Van der Veer said world markets were experiencing "unprecedented volatility", adding: "We are steering the Shell ship through rough waters and so far, OK." "Yes, we are generating large profits. Yes, we have the largest investment programme in Shell's history to create value for shareholders and to play our part in providing safe and cost competitive energy for consumers," he added.