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 116.

    Aye, it's working well for the cartels and government - but not the consumer.

  • rate this

    Comment number 115.

    "The UK petrol market is working well" roughly translated means "We know that the big oil companies and major retailers operate more or less as a cartel raising prices as a bloc & refusing to drop prices when wholesale costs decrease but it is too hard to do anything about it & therefore we will go along with the lie. Motorists? Nah, screw them"

  • rate this

    Comment number 114.

    76. Khameeleon
    Absurd....All the stations in my town (esso/shell)change their prices on the same day...it's 4p a litre more expensive than the larger town 10 miles away....rip off city
    4p a Litre more at £1.40 a Litre. 2.5% variation in price? What are house prices in your area like compared with the larger town? Price of a pint of beer? Council tax bands?

  • rate this

    Comment number 113.

    I wonder how much damage to industry (and thus real productive jobs) is done by excessive fuel taxation? Will the government persist in increasing fuel taxes which cause a drop in tax revenue and hurt industry at the same time?

  • rate this

    Comment number 112.

    If you drive a fuel efficient vehicle then fuel costs are perfectly reasonable. We should be demanding more fuel efficient vehicles as the norm.

  • rate this

    Comment number 111.

    Here they go, buttering us up before the hike kicks in in a few days time . . . Complete propaganda!

  • rate this

    Comment number 110.

    Ah, well that's OK then...I wonder how much tax payers money went into telling me what I thought they'd conclude in the first place? It is clear to anyone other than the Govt and the OFT that there is something wrong with petrol pricing but of course to upset the oil companies and decrease tax revenues is not in the governments interest...so let's keep the status quo. Get out Cameron please!!

  • rate this

    Comment number 109.

    The government could cut the rate of tax on fuel tomorrow if it wanted to but it chooses not to. Rather than the government getting a watchdog to look at the fuel prices and investigate the fuel companies maybe they should take a look at themselves with the exorbitant tax. Also, many of these oil companies ARE the wholesalers so why they complain about the wholesale price going up is a mystery.

  • rate this

    Comment number 108.

    I think Petrol is Cheap...its the Tax that the Govt charge us is expensive...what the petrol firms do to get to the oil is massive and they dont make that much in terms of per litre....the Govt is not interested in the humble working man as long as he gets his massive slice is what counts.

  • rate this

    Comment number 107.

    @50. schoolies
    Please don't talk rot.
    Innovation? The engines of today are the SAME as they were 60 years ago. The SAME. My 1959 Morris Minor does as many mpg as my modern car.
    Hybrids? Still using the same engine when they could use others.
    There are engines that are more efficient but they require new engineering. You could even use a stirling engine for the electric and save some mpg

  • rate this

    Comment number 106.

    @74. No you miss the point. It has 'jumped' in price because the US is Quantitive Easing. Ben Benake is printing billions of dollars. They are currently in QE3. An unlimited session of printing dollars. So that makes the dollars out there worth less.

    Prices are not rising. Your money and US money is worth less!

    What don't you people understand? Quantitive Easing is stealing from you!

  • rate this

    Comment number 105.

    There is no rip-off. Petrol is a wonderful product that loads of people want to buy. The price could double and demand would hardly change

  • rate this

    Comment number 104.

    Whilst the nuances in the retail elements of fuel prices are important, the single biggest factor in the whole pricing issue is taxation, currently at a massive 60%+ of pump prices. All motorists are hammered by taxes, being the largest and easiest of targets, but it seems that the tax collected is frittered away on everything but motoring related issues - mainly, public transport (HS2 anyone?).

  • rate this

    Comment number 103.

    What an absolute pile of rubbish. Was someone paid for this? We all know that tax - oh yes, and that absolute crime, tax ON a tax - makes up a large proportion of the price of fuel.

    No study will ever be on the side of the motorist, because the Government - ANY Government - gains so much in tax when the prices are high. It's in their own interest to ensure they stay that way.

  • rate this

    Comment number 102.

    I wonder if the study was carried out for the OFT by Passenger Focus, you know: those people who reported yesterday that rail passenger satisfaction was at an all time high. . .

  • rate this

    Comment number 101.

    How can competition be working well when in my town we now only have one petrol station (compared to four about 15yrs ago) which so happens to be a Tesco one? Hardly competition if you ask me and they just hike their prices up as there's no-one around to argue with it. So you either have to pay 4-5p more per litre, or drive 5-10miles and back to fill up your tank somewhere else.

  • rate this

    Comment number 100.

    the cost of fuel is a direct limit on how much I use my van for work and generating extra busniess, going out and promoting my self has reduced over the last 5 years! along with parking and road tax its a big expense how ever you look at it

  • rate this

    Comment number 99.

    I'd understand these prices if I could see the physical evidence of the tax money being used to improve roads. *looks outside and see's a small pot hole, worn away yellow lines and poorly painted white lines* Besides, if fuel was cheaper, more people would buy more of it so the amount of money they'd get would be higher rather than pushing prices up to get more money per person

  • rate this

    Comment number 98.

    We are witnessing the end of the era of abundant, easy-to-obtain-and-process, cheap oil.
    This means an ever-upward trend in all energy prices. Not to mention food, transport, clothing and whatever else depends on energy.
    We have to accept this and learn to adapt or pay the (new) price.

  • rate this

    Comment number 97.

    - this is broken, greedy, corrupt, rip-off Britain after all"

    Well, where else is better, and why aren't you there?


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