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
    +3

    Comment number 336.

    So its official, people on here don't like paying high taxes.

    Why is anyone surprised?

    Not me, but then why do the same people criticise Government cuts I wonder?

    It seems they are happy for everyone else to pay tax for their benefit but dislike putting their hands in their own pocket.

    One nation - you are having a laugh!

  • rate this
    +2

    Comment number 335.

    I now only use the car when I have to. In years gone by, I`d take a drive to the shops on a saterday and probably buy something. Now I factor in the cost of petrol, meaning I inevitably stay at home.
    I suspect this to be the case with a large proportion of the UK. Massive fuel tax is contributing to a stagnant retail sector.

  • rate this
    0

    Comment number 334.

    O.F.T. = Office of Fare Trading. Yup, fine fare for the taxman. He eats as much as he can swallow - and then he comes back for 'seconds': petrol tax and then V.A.T.

  • rate this
    +2

    Comment number 333.

    I presume the OFT had their tongues firmly in their cheeks when they spouted this utter drivel. They are clearly not fit for purpose as no will will believe them. Their credibility is shot to bits...

  • rate this
    +12

    Comment number 332.

    So one price for petrol at every forecourt in our town and a significantly lower price at every forecourt in a town twelve miles away isn't local price fixing? Pull the other one - we're not entirely stupid.

  • rate this
    +5

    Comment number 331.

    Conclusion: the government and oil companies are quite happy with the current set up as they are making enough money to buy new friends in North Africa, so shut up moaning you plebs and get back to work and cut down on non-essentials to pay for the commute.

    Find the cheapest option if you can and be glad they are willing to sell you petrol in the first place.

    Or something like that.

  • rate this
    0

    Comment number 330.

    How much do we pay to go to work? Now there's a thought...

  • rate this
    +1

    Comment number 329.

    if we were all high ranking in society we could all have expenses paid-then would you bother about prices?
    NO as you can earn loads- and STILL get everyone else to pay for you to live..... gis a job

  • rate this
    +2

    Comment number 328.

    They said the uk has cheap fuel "before tax",Why? are the government allowed to fleece the public like this.Can't the OFT investigate the government.People have less money now and so are using less fuel.The government still wants more tax,so therefore are very happy for the price to go up.That is the real problem.

  • rate this
    +7

    Comment number 327.

    well what a surprise watch the price go up now

  • rate this
    0

    Comment number 326.

    quick everyone drive to the garage and dont fill up just sit there til prices fall but be prepared you could die in your car waiting

  • rate this
    +1

    Comment number 325.

    Yes, it's working well for one person: the Tax Man. Why is the duty on fuel so needlessly high? I would like some answers to that question.

  • rate this
    0

    Comment number 324.

    The high cost of fuel effects every part of life, getting to work, the price of food and other goods, transport companies going out of business, other companies going out of business because of higher prices of transport so more on the dole so government needs more money to pay more dole. The cycle needs to be broken by the government lowering the duty on fuel, it will make more jobs to pay tax.

  • rate this
    +1

    Comment number 323.

    We have the cheapeast fuel before tax.
    Refineries make such little profit they find it difficult to invest in infrastructure.
    A lot of private pensions require oil companies to make profit in order for the fund to be able to pay a decent pension.
    Peak oil has happened & it is now more expensive to find oil than ever before.
    Some of the biggest oil companies are banks who speculate on prices.

  • rate this
    +4

    Comment number 322.

    This is dreadful and every motorist knows it stinks - it is time to start taking action to punish garages that hike their prices even though the price of oil is flat or falling - just buy the petrol you need and boycott the other goods they try to sell - sweets, magazines, groceries etc.

  • rate this
    +2

    Comment number 321.

    So it would appear that you can now buy whitewash at the forecourts...

  • rate this
    +2

    Comment number 320.

    Does OFT stand for Office of Fixed Trading.?????

  • rate this
    +2

    Comment number 319.

    Can somebody explain why prices not just for different companies, but the same company in different locations is so wildly different to each other?!""

    2% is not wildly different.
    It's called 'the market'. Retailers of any commodity charge what they can get. Why shouldn't they?

  • rate this
    +5

    Comment number 318.

    working well? How come UK diesel is the 2nd most expensive in the world. This is not my idea of working well. This is my idea of being fleeced by a government that knows my car doesn't work very well without diesel in it so I have no option other than to pay it. Still, its cheaper than going by train.

  • rate this
    +1

    Comment number 317.

    Why is diesel so expensive here as compared to Europe? The OFT should re look at this vital sector of the economy. Refineries are saying they have a glut of petrol, only recently it was announced that a large refinery in England was to close because of petrol glut and lower demand. This does not jive withe the rosy OFT picture.

 

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