Using squid as a proxy is useful in a situation where a lab does not have internet access, however sometimes it is necessary to use an upstream proxy. In my case my proxy is bridging two networks to allow internet access from one into the other, however the network with internet access must also make use of a proxy server for HTTP and HTTPS.
The following can be added inside squid configuration.
cache_peer proxy.example.com parent 8080 7 default no-query
never_direct allow all
You may also have to configure the all ACL as follows:
acl all src 0.0.0.0/0.0.0.0
This line has to appear above the previous directives.