OFT says UK petrol market is working well


OFT's Anne Pope: "Most of the increases are due to crude oil prices and tax and duty"

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Motoring organisations have expressed disappointment after a study found drivers are paying fair fuel prices.

The Office of Fair Trading (OFT) study of the UK petrol and diesel market found that little action is needed.

"The evidence gathered by the OFT suggests that at a national level, competition is working well in the UK road fuel sector," its report said.

Motoring policy body the RAC Foundation said the report gave 'little comfort" to motorists.

And there were other misgivings from the Petrol Retailers' Association and pressure group Fair Fuel UK.

The OFT said there was very little evidence that petrol and diesel prices rise quickly when oil prices go up, but are slow to fall when prices drop.

"We recognise that there has been widespread mistrust in how this market is operating," said OFT chief executive Clive Maxwell.

"However, our analysis suggests that competition is working well, and rises in pump prices over last decade or so have largely been down to increases in tax and the cost of crude oil."

But the OFT found that fuel was significantly more expensive at motorway service stations and was concerned that motorists were not able to see the prices until they had left the motorway.

The report asked the Department for Transport to introduce new signs on motorways to display prices.

It also said that while it did not plan to do any more work on the national fuel market, it might still take action in some local markets if there was "persuasive evidence of anti-competitive behaviour".

Independent retailers had complained that oil companies and supermarkets had been using their scale to give themselves an unfair advantage, but the regulator found no evidence of this.

Brian Madderson from the Petrol Retailers' Association, which represents independent forecourts and made the original complaint to the OFT, said the findings were "a grave disappointment".

"This is the sort of thing that the OFT and the establishment have done many times before," he said.

Petrol Retailers' Association's Brian Madderson: "This is a grave disappointment to independent retailers"

"They have failed to take on the big players in the market - the oil companies, the supermarkets - and have left the smaller independent businesses to their fate."

He questioned why wholesale petrol prices had gone up seven pence a litre since Christmas when refineries were saying they had a glut of petrol and demand had been hit by wintry weather.

'Drivers' misery'

The investigation into the £32bn sector was launched in September last year.

Since September it has been hearing evidence from trade bodies, government and regulatory organisations, consumer bodies and motoring groups.

Motorists in Plymouth say they have seen prices rise and rise

"This report will give only limited comfort to the UK's 35 million drivers who continue to pay near record prices at the pumps, but the OFT does identify the true cause of drivers' misery - the chancellor and crude oil prices," said Prof Stephen Glaister, director of the RAC Foundation.

"About 60% of the pump price is accounted for by fuel duty and VAT and we would now call on retailers to provide a breakdown on till receipts to show exactly what the proportion the Exchequer is creaming off."

"Some will find it hard to believe, but the report does make clear that the fuel market is helping keep prices lower and supermarkets have actually helped competition."

Quentin Willson, spokesman for the pressure group FairFuelUK, said he was shocked.

"Every motorist and business in Britain instinctively knows that 'something's not right'," he said.

"The OFT appears to have failed to address the key issues of : why diesel is more expensive than unleaded in the UK when this is not the case in Europe, why falls in the oil price take so long to be reflected at the pump, and why there are such variations in price, often from the same branded forecourts, within the same area."

The report was welcomed by Chris Hunt, director general of the UK's Petroleum Industry Association, which represents refiners.

"The UK has had amongst the lowest pre-tax pump prices in the EU for over a decade so the findings come as no surprise," he said.


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  • rate this

    Comment number 196.

    I think OFT need to be investigated if it is fit for the purpose.

    Anybody who thinks the fuel market is working well must be from a different planet.

  • rate this

    Comment number 195.

    @105. Xylophone
    Actually most people don't want to buy the stuff, but we kind of have to. I have to go to work (the government insists - if I don't then they won't pay me because I am white middle aged British). I can't use public transport because there isn't any because I am not in a big city. I can't afford to live walking or cycling distance because the house prices are inflated.

  • rate this

    Comment number 194.

    143 Ferguspuskus
    Any green policy that makes sense for the public,solar (bills),diesel (more miles) etc gets hammered eventually once the uptake £costs them too much,then,it's kicked into the long grass on a bad news day,and all the logic and green credentials associated don't matter any more!
    Conclusion = Do the right thing for yourself+planet as long as it's approved by the treasury!

  • rate this

    Comment number 193.

    I smoke and drink (not overly) and tax would be better moved there and away from essential living material like fuel - for Businesses and Consumers a-like. I am afraid though that such sweeping reforms would be beyond our country with its uber-dependence on heavy taxation. This report is embarasssing, almost as bad as Cameron's fake pie story. Chringe.

  • rate this

    Comment number 192.

    how much do you pay for red diesel - 80p per litre?

    this is a market that's operating very nicely thanks to you - the poor gullible tax-payers

  • rate this

    Comment number 191.

    Whilst the Exchequer is gathering in huge amounts of money in petrol/diesel tax I think it's a given fact that governemt has no intention what so ever of doing anything to reduce the cost of fuel . Am I right or am I right ?

  • rate this

    Comment number 190.

    So in the report we are told:
    1) We pay a lot of tax on our fuel
    2) The OFT can't see anything wrong with the way things are.

    Are we surprised that the OFT would publish anything other than this?

    This smacks of Old Boys looking after themselves aka a White Wash. Completely insulting to Joe Public.

  • rate this

    Comment number 189.

    This is hilarious stuff.

    "It found the UK has some of Europe's cheapest fuel prices before tax."

    How does the 4th most expensive become some of the cheapest?

    "our analysis suggests that competition is working well"

    We have 8 garages in our immediate area and all of them charge exactly the same price.

    "Office of Fair Trading has said little action is needed" because lower prices = less tax

  • rate this

    Comment number 188.

    #186 and rightly so

  • rate this

    Comment number 187.

    Still the only industry that has illegal price signs.....point 9 is not a valid value.

  • rate this

    Comment number 186.

    Public Enemy number 1 = The Motorist

  • rate this

    Comment number 185.

    OFT would say that , higher prices means higher tax income to the treasury who pay for the OFT so what else do people expect? The truth , that would be cutting their own throats. Is fuel the only thing that has a tax on a tax and I include gas and electricity,why is VAT always added to the final figure including taxes, surely taxes should be VAT exempt.

  • rate this

    Comment number 184.

    It's the TAX thats the problem,it has always been an easy target by ANY party in power to raise money.

    It will never be any different as I can't see a way that this Government or anyother will take any notice of anyone regarding changing the situation so we pay less for road fuel.

  • rate this

    Comment number 183.

    If the Goverment wants to get the economy moving again when will they realise that fuel costs are a big part of that? Lower the price (ie taxes) as we all know they cant control the price and things might start MOVING again!

  • rate this

    Comment number 182.

    I could have given the government that information for a mere £1,000,000 consultancy fee.

    That should have saved them a few more million pounds.

  • rate this

    Comment number 181.

    125.MajorityWorld Steve
    Fuel price is not directly relative to crude, fuel tax is a fixed amount (78p) not a percentage and there is then refining, transportation retail markup plus profit. Price of crude accounts for 17% of the price of petrol at the pumps so half the cost of crude and it reduces the price of petrol by only 8%.. sad but true

  • rate this

    Comment number 180.

    @129. frankiecrisp

    I don't agree at all, all people want is a 'fair' price.

    I now pay nearly the same to fill up a 1.6L Mini than I did to fill up a 3.5L Mercedes 5 years ago....... and the Mercedes tank held 30 litres more............does that sound fair ?

  • rate this

    Comment number 179.

    This is the funniest story I have ready in ages, are we supposed to beleive these fools?

    Working well for who? The directors of the oil companies?

    Why won't the government admit that they can not stop the oil traders playing with the price and that they tax petrol to the detriment of the motorist?

  • rate this

    Comment number 178.

    So we've got nice cheap petrol before tax. That's so comforting to know. At least it confirms beyond any doubt at all why it's so expensive to go anywhere in this increasingly useless country.

    I'd love to know how much spending is lost because people find it so expensive to go out. When a trip to the seaside is £40 in fuel alone it's easy to see why people don't go and so retailers lose out.

  • rate this

    Comment number 177.

    nb - you/we can vote out a government - esp if they are pushed for serious reform on taxation on fuel

    BUT can you affect an oil company? Get rid of an executive?

    So you'll be stuck with their manipulation


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