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 216.

    Due to more economical cars with low CO2 emissions, the government no longer makes what it used to on Fuel Duty and Vehicle Tax alone.

    Consequently, National Road Charging is inevitable in future, raising capital, helping meet emission regulations and cutting congestion.

    Don’t kid yourself. Its only going to get more expensive.

  • rate this

    Comment number 215.

    total disgrace.

    who are they kidding????

    as mentioned - cap fuel at e.g 99p a litre and watch the economy move

  • rate this

    Comment number 214.

    "£32bn sector"
    Haha damn, that's exactly the same as this crazy high speed train project of ours. How about scrap that and don't tax us for a century? At least then I can be dead when they come back.

  • rate this

    Comment number 213.

    A study of competition in the UK petrol and diesel market by the Office of Fair Trading (OFT) has concluded that little action is needed.

    Maybe the set terms of reference of investigation were condusive to "competition" investigation, but not condusive to "pricing" discrepancys.

    The investigation was not about pricing, so it of course has not reflected it in its findings

  • rate this

    Comment number 212.

    and to pay for this pointless report we shall be raising fuel tax,

    yours sincerely,

    your friendly government clown.

  • rate this

    Comment number 211.

    For real stories behind the petrol price scandal and privatisations join Twitter because you ain't gonna get it on here sadly...

  • rate this

    Comment number 210.

    Did anyone really expect a government department to say we were being ripped off. So how much did that report cost and who paid for it? Taxpayers? Well at least the government can get the money back, just add a few more pence to petrol and screw us twice.

  • rate this

    Comment number 209.

    I agree that charging VAT on fuel duty is outrages and should be illegal. Its a tax on a tax.

  • rate this

    Comment number 208.

    157. Grumpy
    Utterly predictable response. How hard is it to get it through your head? SOME PEOPLE HAVE NO CHOICE BUT TO USE THEIR CARS.

    Low pay which means they cannot move closer to work, living in an area with few (if any) job prospects, and a public transport system (also affected by the price of fuel) that is truly woeful. Can we please stop with the clichéd, idiotic comments?

  • rate this

    Comment number 207.

    OFT - now shown to be a worthless quango working against those it is supposed to represent. Get rid

  • rate this

    Comment number 206.

    Fuel prices are high, no doubt about it. Is the tax on them fair, yes and no. We get fleeced at every oppurtunity in this country and like idiots we accept it. They know they can get away with it as we don't do anything (with any clout) about it, what we need to do is strike. Every road user, haulage company strike for 2/3 days. That will make a huge dent in the exchequers coffers .

  • rate this

    Comment number 205.

    Now, there's a surprise!

  • rate this

    Comment number 204.

    As far as taxation is concerned David Cameron should be called the "fair" man. It seems to be his favourite explanation for everything...

  • rate this

    Comment number 203.

    " freindleonewhocares
    What prices and countries have they compared?"

    Maybe you should read the report. The BBC even provides a convenient link to it so you don't even have to spend any time searching for it.

    To those advocating removal of fuel duty, what taxes would you propose to raise instead. Income tax (by about 5p)? NI (to about 15%)? VAT (to 30%)? "sin" taxes? Do tell.

  • rate this

    Comment number 202.

    'Little action is needed against the current system'? Did anybody else's BS detector just go off?

    'We've reached peak oil', I see some saying. Sure we have... How much oil is under the Arctic ice? How many other oil fields have we yet to discover/exploit? This 'peak oil' lie is just an excuse to justify a rip-off culture.

    I thought one of the Tory election pledges was to rid us of quangos?

  • rate this

    Comment number 201.

    The Cartel gets the result it wanted.

  • rate this

    Comment number 200.

    Government taxation on petrol prices cripples the economy. The quickest way to raise consumer spending is to reduce petrol prices. The argument that government would find some other way to tax us is weakened by the fact that it costs money to collect and then spend taxes. Much cheaper not to collect the money at all and leave it to consumers to decide how to spend it.

  • rate this

    Comment number 199.

    You should be glad of the tax on petrol. So all the benefits cheats who drive a car are still actually paying something back into the system! You think the country would be a better place if they werent collecting fuel duty? Where would the money come from then? If you cant afford it, on yer bike!

  • rate this

    Comment number 198.

    they are joking we pay the most for petrol in europe so what you are saying is the goverment take to much tax and they do not pass it on the customer when it goes down and when it goes up it goes on the same day its on an up serge now gone from £1.28.7 to £1.32.7 has the price of pretol gone up just put the right things on here and not think that the tax payer will pay all

  • rate this

    Comment number 197.

    At least wow we know who's getting a backhander.


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