Edward Davey MP told the House of Commons the oil giants will face the “full force of the law”, which could include large penalties imposed by the UK and European regulators. He also suggested there could be a case for consumers to receive compensation if they have been overcharged for fuel for many years. 

“If it turns out that hard-pressed motorists and consumers have been hit in the pocket by the manipulation of markets, the full force of the law should come down on those responsible,” he said.

BP and Shell have seen their share prices remain largely unmoved by the allegations, and Fitch Ratings said the firms have enough cash on their balance sheets to be able to absorb large fines with limited impact on their businesses.
 
“The biggest settlement so far over LIBOR was CHF1.4bn that UBS agreed to pay US, UK and Swiss regulators last year. Even if investigation does uncover wrongdoing, it does not necessarily follow that fines for alleged oil price manipulation would be of a similar size.

“But if they were, we would not expect them to have an impact on credit ratings, as these producers typically have between $10bn and $20bn of cash on their balance sheets,” Fitch said in a statement.

“Significantly bigger fines would still be manageable, as shown by BP’s ability to cope with the cost of the Macondo oil spill, but would be more likely to have an impact on ratings.”

However, today the BBC is reporting BP has asked Prime Minister David Cameron to intervene over the escalating costs of the Gulf of Mexico oil spill in 2010.

The cost to the firm of settling fictitious compensation claims for the disaster could make it a takeover target and threaten its dividend, BP has reportedly warned.

BP put aside $7.8bn (£5.2bn) when it agreed to pay compensation in 2012, but the company now expects the final figure to be much higher.

BP’s shares closed 0.2% lower at 467.7p yesterday, while Shell was up 0.47% to trade at £22.37.