(FORTUNE Magazine) – The British government dealt another blow to the desperate attempts of oil- producing countries to shore up prices by announcing it will no longer buy North Sea oil at above-market rates. In fact, Energy Minister Alick Buchanan- Smith told Parliament, the government plans to abolish the British National Oil Corporation--the public marketing body for 51% of North Sea output--and let producers sell their petroleum for whatever the market will bear. The Thatcher government's move would essentially eliminate an official British price for oil. Established by the previous Labor government--ostensibly to maintain adequate supply levels--BNOC was never effective and had lately been a drain on the British treasury. The $28.65 a barrel BNOC has been paying was well above spot prices, creating losses of about $75 million in the past nine months. An oil analyst for Cambridge Energy Research Associates said the big players in North Sea oil, British Petroleum and Esso, would have no difficulty operating on the spot market, but that smaller, less experienced companies could end up bringing prices down in their eagerness to sell. The prospect of lower prices has been OPEC's abiding concern. Philip Dodge, oil analyst with Donaldson Lufkin Jenrette, said that with worldwide inventories relatively low, oil prices have been holding up far better than expected.