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 256.

    Great news - so now why don't they get back to doing something which is not working well for consumers - like the personal account banking.
    Don't forget that the OFT is being abolished next year. This new is just "fluff" so that they make good news announcements in their dying days.
    In the main, the OFT has attacked the little guys - but used "soft touch" with the big guys. Limp-wristed, really.

  • rate this

    Comment number 255.

    "before tax".......there you go people, it's not the companies, it's our greedy incompetent government screwing us out of money we don't have to fund their rediculous over-priced projects (HS2) and to line their own pockets via the still unchanged expenses system.

  • rate this

    Comment number 254.

    The government may get a lot of tax from sales of diesel and petrol but if they did cut tax on fuel what would they increase the tax on to make up the shortfall, people expect a free NHS, child benefits and other government handouts but where do they think the money comes from. The best way is to live right next to where you work.

  • rate this

    Comment number 253.

    @184 "It's the TAX thats the problem"

    Exactly, but the powers that be simply create lots of diversional "news" when the tax goes up. If people argue, they blame oil prices and then drip feed us some anti oil company stuff via the media.
    The tax is problem, the tax is so high because our govt have come to rely on this massive income to compensate for incompetence.

  • rate this

    Comment number 252.

    I've been banging on about this for ages. The vast majority of the issue is with TAX, not retailers, oil companies, wholesellers or speculators.

    Lobby the govt and your MP to cut that tax and watch prices fall, reduced inflation, job creation and a growing economy.

  • rate this

    Comment number 251.

    I live in s.w. London - not far from Epsom. I went over to Greenwich last Sunday (17 miles away) and diesel was 1.36 a litre at Sainsbury's in Greenwich - 4p a litre cheaper compared to my local Sainsbury's at North Cheam. Same supermarket, same city. Is the market working well? I don't think so!

  • rate this

    Comment number 250.

    The Fuel pricing "con" is exacerbated by the fact we changed from pricing in gallons to pricing in litres..ok I ask the question why should something be priced in a measure that No one buys? Other than to mask "small increase" and pretend its only a tiny amount..multiply it by a tank full and it becomes significant! If the price of a pint of beer was priced in mls..would you buy an ml of beer?

  • rate this

    Comment number 249.

    Why am i not surprised by the report, when oil prices do drop, the reduction is NEVER passed on to the pumps, regardlesss of what the OFT reports, as soon as you get a slight increase in the price of a barrel of oil, UP GOES the price of petrol, we in the UK are ripped off from every angle, fair play is something the Govt needs to look at, but then its revenue for their upcoming pay rise.

  • rate this

    Comment number 248.

    What else did anyone expect then to report...

  • rate this

    Comment number 247.

    Petrol prices are only going to go one way. This and future Governments will never reduce the tax on fuel as cars are a luxury/necessity (depending on your circumstances) and they know people will pay it.

    To avoid paying an extortionate amount of tax, I've opted to just use the car less and walk and cycle a bit more where I can. Saves me a small fortune.

  • rate this

    Comment number 246.

    Typical OFT whitewash everyone knows the oil companies are ripping us off and collude with prices, get rid of the OFT as it is just a toothless tiger who gets its belly rubbed by the big companies

  • rate this

    Comment number 245.

    Hmm. For years now the petrol companies and supermarkets have been saying they don not run a cartel. Yet they all appear to put the prices up together and then lower them again slightly at the same time. That'd be just like a cartel controlling the market. They don't damage each other. Yet they don't operate a cartel do they.

    Has the OTF been wined and dined and had the report written for them?

  • rate this

    Comment number 244.

    It's an extra tax on going to work.

    I'm surprised that they did not add that it was the fairies at the bottom of the garden to blame for any false perceptions from the public about cartels...
    After all, they think we will believe their conclusions as being just as realistic.

  • rate this

    Comment number 243.

    Is this news? Really?

    Fuel is expensive becuase of the ridiculous tax.

    We know this.

  • rate this

    Comment number 242.

    Office of Fair Trading have got be really incompetent or a government puppets or both how hell did come to conclusion perhaps they should got their office & look around instead doing from their desk

  • rate this

    Comment number 241.

    Chris Hunt, director general of the UK's Petroleum Industry Association

    Have they got 2 letters the wrong way round here?

  • rate this

    Comment number 240.

    Crude oil.. fine.. Exchequer... fine... but how about the butchery and mismanagement of the pound?

  • rate this

    Comment number 239.

    Why is Diesel in Europe cheaper then petrol and not in the UK? Duty on diesel is Lower then that on Unleaded in France but they are the same in the UK

  • rate this

    Comment number 238.

    Who has shares with whom? At what point will our so called 'leaders' realise few believe anything that comes out of their toadies.

  • rate this

    Comment number 237.

    For the record, I live in Central France & I filled up my car this morning at the cost of €1,60 per litre, which I think works out to £7,26 per gallon! Shocking innit?


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