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 236.

    Are we sure they did their research in the UK?

    It beggars belief they could make this finding. You can just see all those billionaire oil magnates rubbing their hands with glee. They now have an even bigger licence to print money than they have ever had before. Just watch how fast the price goes up in the next few days.

  • rate this

    Comment number 235.

    "Working well"!! It's a rip-off and totally unreasonable and unfair when you have a product where the vast majority of the retail price is made up with various taxes.

    The OFT is obviously not fit for purpose!!

  • rate this

    Comment number 234.

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

    So that is OK then.

  • rate this

    Comment number 233.

    cheapest in europe is that why foreign lorry driver fill up before entering the uk so they dont have to buy it here

  • rate this

    Comment number 232.

    Until the issues of unjustified overtaxation and fraudulent double taxation of fuel are addressed, there is little point in worrying about the small percentage of the pump price that actually goes to those who produce and sell the stuff.

    It is extortionate taxation of fuel that is holding back the UK economy,

  • rate this

    Comment number 231.

    Were the OFT buying from the same petrol stations that we all have to?
    I'm just really confused :-)

  • rate this

    Comment number 230.

    What utter c##p they are trying to make us swallow this time. It matters not to the consumer what the pre-tax price is, it is the full retail price that hurts and that is where the tax overburden lies. Stifle the transport of this country when there is no viable alternative (HS2 not until 2032!?!?) and the economy will suffer for many years to come.

  • rate this

    Comment number 229.

    Congratulations OFT ! in one fell swoop you have destroyed any credibility the Office had left. "Some will find it hard to believe"? Must be the understatement of the century. Millions of motorists up and down the country know every time the set foot on a forecourt they are being right royally ripped off

  • rate this

    Comment number 228.

    Surprise, surprise. It is not an explanation to say the UK "has some of the lowest prices in Europe" The Tax Take on fuel makes the price at the pump what it is, and on that basis - we DO NOT HAVE THE SOME OF THE LOWEST PRICES IN EUROPE !

  • rate this

    Comment number 227.

    So the US only pay a third of the fuel duty that we do, yet they are the biggest fuel guzzlers on the planet. Their economy seems to be working fine as well without their government ripping them off for tax. This article is garbage and only succeeds in further infuriating the UK motorist.

  • rate this

    Comment number 226.

    Was ANYONE expecting this to be anything more than a pat on the back for the big business - really?

    OFT - office of fawning twits is how they are known if the company they are dealing with is big enough.

    As to the taxes on the fuel, although they are monstrous - what would you like taxed more? Water? After all they still cant tax air (yet...)

  • rate this

    Comment number 225.

    OK its the tax man but why did they have to point out to the suppliers that we aren't paying them enough compared to parts of Europe nice one fuel prices will now go up

  • rate this

    Comment number 224.

    If the government invested all the money from fuel tax on improving public transport, such as making rail travel cheaper than driving then I wouldn't object to such high tax. The fact is petrol will run out, is bad for the environment, and new roads need to be built for the increasing amount of cars on the road. Drivers (incl me) should think about the big picture and not their own convenience.

  • rate this

    Comment number 223.

    Yet another example of the government treating the public like we are all really stupid. The OFT have been told what to say by the Treasury as they don't want prices to drop. High prices actually generate less tax revenue as people find other ways to avoid using a car. If they kept the price at a reasonable level and stopped ripping us off, people would buy more fuel generating more tax.

  • rate this

    Comment number 222.

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

    Then can we now have evidence whether the OFT is "working well" because this "evidence" would seem to contradict their statement?

  • rate this

    Comment number 221.

    Is there anyone surprised by this?

  • rate this

    Comment number 220.

    If the government cut the tax on fuel, it would just give the oil companies more scope to increase their prices.
    Quoting 'market forces' and as this coalition of the right worship at the altar of the market, nothing would be done.

  • rate this

    Comment number 219.

    The motorist always has been an easy target for governments, especially in the UK.

    For the government to cut taxes on petrol it would need to reduce spending further (taxation really cant rise anymore).

  • rate this

    Comment number 218.

    Working well for who?? I'm off to Venezuala for me juice...

  • rate this

    Comment number 217.

    lots of "brown envelopes" flying round the OFT


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