Minister says to "punish" oil firms that fail cut price

By Alister Doyle, Environment Correspondent

OSLO (Reuters) - Oil companies are failing to pass on a near halving of prices since July and customers should "punish" the worst laggards by buying elsewhere, the government's new Minister of State for Energy and Climate said on Monday.

Mike O'Brien also said retailers were being too slow to cut prices of food and other products, which have become cheaper because of lower oil prices, during the worst financial crisis since the 1930s.

"What we need to do is make sure that the consumer is out there and supporting those who are reducing prices and punishing those who are failing to reduce prices," he told reporters in Oslo on his first trip abroad since his appointment this month.

Brent was at $77 a barrel around midday on Monday against a July peak at about $147. Oil companies say that a large chunk of the pump price goes in tax to governments.

"We have seen a very substantial drop, about a halving of the Brent crude price since July," O'Brien said during a conference on combating climate change. "That's not being fed through at the moment into pump prices."

"This isn't a government controlled market ... We want to see the consumer going to those forecourts which are lowering prices and avoiding those which aren't," he said.

"There is always this lag, not just by oil companies but also by retailers selling food and other things, who put up prices when things get difficult ... but there's a lag in reducing the price."

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