Britain's Osborne urges petrol firms to pass on falling oil costs

LONDON, Nov 6 (Reuters) - British Finance Minister George Osborne urged petrol retailers on Thursday to lower their prices in line with a fall in oil costs, saying he would be watching them carefully to ensure savings were passed on to consumers.

The price of oil on the international market has fallen by more than a quarter since June as an overall increase in supply, driven in part by increased U.S. production, has coincided with slowing increases in demand linked to slow economic growth in China and Europe.

"Our message today is very clear: the oil price has fallen and we expect that to be passed on to people at petrol stations as they fill up their cars," Osborne told Sky television. "We expect the oil companies to do this and we'll be watching very carefully to make sure that they do."

Consumers complain that oil firms are quick to raise prices when wholesale costs go up, but slow to react when they go down. Britain's Serious Fraud Office has said it is looking at the way oil firms set prices, but has not launched a formal inquiry.

Supermarkets Asda, Tesco (Xetra: 852647 - news) and J Sainsbury Plc all said on Thursday they were planning to cut petrol and diesel prices by 1 pence per litre across stores.

Osborne has previously sought to address public anger over the price of fuel by cutting the tax charged on a litre of petrol and scrapping planned increases in the duty. (Reporting by William James; additional reporting by Sam Wilkin; Editing by Vincent Baby)