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 316.

    @310. Birchy

    Or they might *gasp* use bikes or simply walk. Oh, it's unthinkable! I have to walk a whole five minutes to the corner shop?

  • rate this

    Comment number 315.

    Anyone up for a "French" style protest? ................No, I thought not, best start getting my hand a bit deeper in my pocket again then.

  • rate this

    Comment number 314.

    I still cannot see how Mr George has not noticed that the cost of fuel drives everything in this economy. Reduce fuel duty, means cars/lorries are cheaper to fill which leads to people having more money in their pocket for other things/products which are shipped by road are cheaper due to the lower transport cost. This means that the gov't will get more through VAT which will make up the loss.

  • rate this

    Comment number 313.

    So... The OFT - A Government funded Body....

    Takes us 4 Months to tell us what we already know.

    The Government are ripping us off with Taxing upon tax, we have the heaviest Fuel Tax burden in the EU and Diesel is out of kilter with the rest of the EU...


    Smile and Wave Boys... Smile and Wave!

  • rate this

    Comment number 312.

    Those commenters moaning about tax - that's not what this article is about. It's about the competitive market between petrol stations. We know tax is high, but it's a completely separate discussion. Anyhow, I don't care. I drive a Porsche and guzzle juice like there's no tomorrow (cos there isn't really a tomorrow the way we're going). In fact, they should increase the price of fuel! Less traffic!

  • rate this

    Comment number 311.

    There is a massive problem with household expenditure. If people are only able to spend on 'existing', the economy will stay flat.

  • rate this

    Comment number 310.

    It'll get to a point where the balance will tip too far, people will stop using cars and the govt will be forced to reduce tax in order to regain that tax income.
    You know what im saying, we're being milked like cash cows.

  • rate this

    Comment number 309.

    @254. moodymuppet
    The majority of tax is spent on collecting it. The largest cost in the DSS (or what ever it is called these days) is the staff working in administration.
    We could ALL be massively better off if we scrap most of 'government' and settled to have single flat benefit, flat tax, slim all branches of government radically. (95% radically)

  • rate this

    Comment number 308.

    David Cameron and his ilk are so proud of the mobile economy that they created; what is going to happen to that economy when people decide its too expensive to be mobile?

  • rate this

    Comment number 307.

    I am just a poor boy and getting poorer - whilst these political liars take us to the cleaners. The masses are taxed to death whilst the few pay little and companies like Starbucks pay nowt.This OFT is corrupt just like everything else in Britain.

  • rate this

    Comment number 306.

    Fair trading? How come Tesco can charge one price at its Abingdon store & a cheaper one at its Swindon store? Shame on you Mr Tesco

  • rate this

    Comment number 305.

    Right Then It is successive Governments / Politicians that have been the culprits all along and now they have nowhere to hide.
    They are all as guilty as each other blaming everyone else apart from themselves for the shit that they have got us into. Sack the lot. Election Now

  • rate this

    Comment number 304.

    Did anyone really expect anything different coming from an official body in rip off UK?

  • rate this

    Comment number 303.

    The OFT have just given the green light to some immediate price rises in fuel, after all its only fair.
    The OFT is now out of date and out of touch, what a waste of time and money.

  • rate this

    Comment number 302.

    Diesel is more expensive in the UK due to the tax being the same as on petrol unlike virtually every other country in the world.
    Also refining petrol and diesel in the UK is not profitable so no money is being spent on new more efficient refineries, the major oil companies are closing or selling their UK refineries as a result and just importing finished products. Tax is the reason for high prices

  • rate this

    Comment number 301.

    Orwell would be proud.

    "Office of Fair Trading" - office to ensure unfair trading continues for gov't sponsored cartels

  • rate this

    Comment number 300.

    I missed this bit

    "supermarkets have actually helped competition."

    Now I know they are taking the mick.

  • rate this

    Comment number 299.

    How come the OFT can blast the state-owned banks for trying to return to profitabilty by legitimately charging people to borrow money (yes, we should expect to pay reasonable charges if we can't manage our own money) yet it ignores the true villains of the petrol industry (refiners) and says everything is rosy in the garden??

  • rate this

    Comment number 298.

    Fuel tax, anything but seal tax loopholes and close tax havens. Is it that they have friends who use them?

  • rate this

    Comment number 297.

    Fuel prices are high because of high taxes. Taxes are high because (a) we have a welfare state and (b) we're in debt. Even if we invested in alternative fuel sources, the government would have find a way to tax us the same amount.


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