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 376.

    Stop blaming oil companies and/or retailers, read the reports conclusions.
    "the UK has some of Europe's cheapest fuel prices before tax"
    "About 60% of the pump price is accounted for by fuel duty and VAT"
    It's the government, ie greedy parasitic politicians, who are ripping us off - no one else!

  • rate this

    Comment number 375.

    OFT should be replaced, Oil companies Rule. MPs should demand a public enquirery , not into the Oli companies, but into the running of the OFT

  • rate this

    Comment number 374.

    Petrol became so expensive about 2 years ago. Now I dont bother looking at how much is actually costs per litre / gallon. Dont fill up on service stations and look out for offers in supermarkets. Thats about all you can do. Its just a perfect excuse for putting the prices up on everything. Its about time the government invested some of the tax it collects from fuel to develop alternatives.

  • rate this

    Comment number 373.

    What total rubbish, this is a white wash just like orginal Bloody Sunday, and Hillsborough reports. So do you really believe this?
    The only way to change Britain for the better is to get rid of the 3 main parties, they are corrupt.
    I think it is time to find a website you can trust, has the bbc are just a political mouth peice for the Govt.

  • rate this

    Comment number 372.

    The U.K. Spring?

  • rate this

    Comment number 371.

    I live in Broadstairs Kent, 15 miles away petrol is 4p litre cheaper, and in Twickenham Lonodon its 6p litre cheaper. How can they say that the industry is working well.
    All the petrol stations in my surrounding area all charge the same price. Its one big con.

  • rate this

    Comment number 370.

    I wonder how the UK pre-tax price compares to the US pre-tax price?

    As a Brit who moved to the US last year, I'm paying the equivalent of 55pence per litre including local tax.

  • rate this

    Comment number 369.

    Prices should be the same from town to town.. and as for motorway services surely they force these robbing companies to reduce their prices in line. Really whats the point in saying anything, because neither the Goverment or OFT will ever listen to us the poor public

  • rate this

    Comment number 368.

    My nearest diesel prices (at 26 January):
    141.9p Shell (1/2 mile away)
    149p Unbranded (4 miles away)
    A round trip of 50+ miles will save me about 4p a litre
    Competition working well in my part of the country!

  • rate this

    Comment number 367.

    This is a joke. We have 2 Tesco stores often selling at different prices. Why do my local Asda, Sainsburys and Morrison's all charge the same price for fuel? You do not see it on fruit and veg. for example. Have the OFT been got at by various interested parties? A real whitewash of a report.

  • rate this

    Comment number 366.

    Regardless of how many reserves, we need to decrease our reliance on oil"

    Most definitely. Oil also has many more uses beyond burning it for energy and those uses will not be available once it has run out.

  • rate this

    Comment number 365.

    Having just rolled out of the latest oil industry junket, the OFT is pleased to report that the UK petrol market is working well. It is working well for the UK Exchequer, the oil companies, oil company shareholders, the fuel suppliers and the many beneficiaries of golfing weekends expensed by the aforementioned.

    Next week they'll be stating that the power & gas companies are beyond rebuke.

  • rate this

    Comment number 364.

    Lets apply logic. Lower tax = lower prices = more tax money generated. At current rate (for ease) say they got 60p per letre and the average person brought 10 letres and there are 100 people in a day that buy it.
    Thats £600 tax money
    At a lower rate, 40p per letre, people can afford to buy 15 letres and more people can afford to use their cars so 150 people a day buy it.
    Thats £900 tax money

  • rate this

    Comment number 363.

    OFT fails to mention we pay VAT on Fuel tax, that's double taxation. You are paying 20% VAT on 65% Fuel Duty...

    Can someone explain that to me??

    When i pay income tax i don't pay another % of the amount i already paid!

  • rate this

    Comment number 362.

    Move some of the (OMG how much!) 60% tax onto fizzy drinks

  • rate this

    Comment number 361.

    I'm glad cars don't run on beer at c. £5.25 per litre

  • rate this

    Comment number 360.

    The OFT found in favour of the Oil cartel? Well, I never saw that coming! Same as they ruled there wasn't price fixing in the supermarkets, price fixing over CD's etc. Despite in the latter case I was witness to it in action. Waste of tax payers money tbh. I would ask the OFT, if Oil price per barrel goes down due to high stocks, what else, bar price fixing, causes prices to rise? Hmmm?

  • rate this

    Comment number 359.

    "A study of the UK petrol and diesel market by the Office of Fair Trading (OFT) has said little action is needed"

    What a totally Politicised response from the Office of "Fair" Trading.

    Political 'gerrymandering' and outside influences are leaning hard against the OFT.

    Disgusting morally-corrupt Politicians are at play here. This stinks of corruption.

  • rate this

    Comment number 358.

    Same result as previous investigations. What a waste of effort.

    Britain is a captive market subject to rip-off marketing. In Luxembourg the price is set by the govt, it's time same was done here. Use a clear formula based on crude price and exchange rates.

  • rate this

    Comment number 357.

    Diesel costs more since converting petrol refineries to diesel takes a long time and the shift to driving diesels was quick.


Page 33 of 51


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