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 276.

    I reduced my mileage in 2011 from 9000 pa to about 1500; largely by stopping certain journeys and having everything that I buy, delivered.

  • rate this

    Comment number 275.

    I think the clue is in this statement,

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

  • rate this

    Comment number 274.

    If you look at the prices for petrol on the continent, they are actually about the same as in the UK. I bought some in Belgium a couple of weeks ago. Diesel though is a totally different matter. Why is diesel 10 to 15p a litre dearer than petrol in the UK and about the same amount cheaper than petrol on the continent? This affects hauliers, and therefore shop prices on anything delivered by them.

  • rate this

    Comment number 273.

    OFT we cannot trust you. Why has the price of diesel has increased over unleaded in the last 10+ years (in tandem with Govt's road tax restructuring for CO2 emissions... we know the reason). Also no review of oil companies internal billing. "We only make a few pennies on the forecourt sales of fuel", yes but with your internal billing you make huge internal profits on the refining side. Fat cats.

  • rate this

    Comment number 272.

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

    Really ? And how long did it take for them to come up with this nugget that has ALWAYS been the case !!! and will anyone ever explain why !!

  • rate this

    Comment number 271.

    The price of fuel is clearly not high enough, as I haven't seen a single electric car yet.

  • rate this

    Comment number 270.

    So, in a nutshell, it's the government that's fleecing us and trying to blame it on producers and retailers!

  • rate this

    Comment number 269.

    Well something is not right,we have had bad weather so less motoring and if anybody has been out on our roads ,am I the only one to notice a lack of traffic,so people are cutting back,so there should be a surplus of fuel,this should result in prices going down,but the sellers are reluctant to reduce prices,I also have noticed that the LPG is creeping up why?

  • rate this

    Comment number 268.

    Due to the ever spiralling fuel/tax/insurance costs, I have had to ditch my car and get a motorbike, which has a 25 litre fuel tank. Thus, putting me at greater risk when on the road and likely at some point to cost HM Treasury more in Ambulance/NHS costs as and when I eventually get knocked off. Even a 25L tank is expensive to fill these days! But at £74 road tax & £83 insurance it's worth it!

  • rate this

    Comment number 267.

    I to like Quentin Willson am absolutely shocked at this report .Yet again a whitewash for the benefit of the Petroleum Industry. The average motorist could do a better report than this . Another complete waste of money and time.

  • rate this

    Comment number 266.

    @206. Craig Ferguson
    The people of Britain haven't the stomach, morals, guts, balls or anything to get up off their collective lardy backsides, abandon 'East Enders' and do something useful. That is why we are continually on the receiving end of this crud.
    The people of Britain can't even be bothered to change their normal voting habit when MPs prove worthless.

  • rate this

    Comment number 265.

    #91, fine in theory but it assumes people can afford to buy the more efficient cars in the first place. You know, it's the same predicament as the people who can't afford high heating bills but also can't afford the up-front costs of insuating their home.

  • rate this

    Comment number 264.

    @157 Grumpy

    Please engage brain before posting!

  • rate this

    Comment number 263.

    strike people or at least sack everyone in government for lying and stealing were being bled dry we need a new robin hood to steal back our money

  • rate this

    Comment number 262.

    What a load of rubbish, obviously the OFT were looking at a different country when you compiling their report. People are getting fed up with money spent producing reports which don't answer the questions and don't reflect reality. It is costing a crippling amount of money to fill up my tank. The government and petrol industry needs to wake up and do something.

  • rate this

    Comment number 261.

    Well, I will continue to get my diesel in the Republic of Ireland. I save money and avoid the stupid levels of fuel tax imposed by Westminster.

  • rate this

    Comment number 260.

    Gra-gra-granville, fetch yer cloth, there's way too much whitewash on here.

  • Comment number 259.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 258.

    The problem is not the manufacturers, suppliers or sellers; it. is. purely. government.

    George Osbourne takes over 65p plus of every pound paid at the pump - it is him who is pricing the poorest out of driving.

  • rate this

    Comment number 257.

    "A Disgruntled Native
    How many other oil fields have we yet to discover/exploit?"

    The cost of doing so only becomes economic when the price per barrel keeps going up. The price goes up as demand exceeds supply.

    "This 'peak oil' lie is just an excuse to justify a rip-off culture"

    It will run out some day. The question is when and why wouldn't you want to push that event further into the future?


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