Sir Richard Branson calls Opec ”illegal cartel”, plans to build oil refinery

LONDON – Virgin Atlantic boss Sir Richard Branson has called on governments across the world to break the monopoly of the Opec and try and build at least 10 refineries to meet the growing demand for petrol and oil.

Sir Branson said that the fuel costs were hitting his airline hard and consequently he was exploring possibilities to build a refinery and towards this end was planning to sound out the government, “At the moment there’s an enormous shortage of refineries in the world. Every one of the refineries is at capacity, the oil companies are not building new refineries, and we have put a team on trying to raise money to build at least one,” he said.

Fuel bills for Virgin Atlantic and Virgin Express had hit £750 million a year, an increase of over £300 million a year over the last couple of years. And in the aftermath of the tragic Hurricane Katrina, fuel prices tore through the roofs hitting consumers and businesses hard. Oil companies were accused of gouging prices, but in the end people had to pay up. “If we can encourage governments to confront this issue, if we can get western governments together to work out how to deal with the issue, we think we can make a real difference,” Branson said adding that even a tiny reduction in the airline’s fuel costs could make a significant difference to consumers.

As fuel prices have begun returning to pre-Katrina rates, a price war has broken among suppliers to attract more customers. Esso confirmed a 4 pence reduction in its UK petrol and diesel prices effective from Friday, while supermarkets Asda and Tesco have already done so. Royal Dutch Shell and BP were also planning to cut prices.

Sir Branson came down heavily on the Opec countries and said that they collude to keep oil prices high, “The western world should have a counterbalance to that. If $20 billion was put aside to build 10 new refineries, oil prices would start to collapse again,” he said. He felt that the government should reward companies who practice fuel efficiency by providing tax breaks. “If they intervene in the short term and do something too radical to stop growth, we will have an incredible recession,” he concluded.