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
    +1

    Comment number 396.

    In the next budget, "because all is fair with pricing (BEFORE TAX)" maybe this will be the excuse for putting a few pence on the fuel cost????? arrrrrrrrhhh

  • rate this
    +4

    Comment number 395.

    Whitewash indeed. An oscar to them for keeping a straight face whilst stating the fact. Tell you what really annoys me.. How supid they think
    we all are.

  • rate this
    +2

    Comment number 394.

    Why is diesel so expensive here compared to the rest of Europe? In Germany for instance it is cheaper than petrol

  • rate this
    +2

    Comment number 393.

    The key term is 'cheap before tax', we have a very competative marker with several petrol stations close by so if one puts their prices up i go to the other, althrough only saving £0.50p on a full tank every little helps. The problem is the tax!

    The only way to make fuel more affordable to to reduce the tax. The power is in the governments hands but their hands are firmly in their pockets

  • rate this
    +10

    Comment number 392.

    Ok, looks like it's now cheaper to drive to Venezuela and fill up over there.

    (According to the BBC calculator, it'd cost me £137 pounds to fill up my van in the UK and just £1 in Venezuela).

    Does anyone want to club together and hire an Oil Tanker - I'm sure it'd still work out cheaper and maybe there's a garage in Venezuela that does points? :-)

  • rate this
    +3

    Comment number 391.

    Office for Fair Trading, hahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha...

  • rate this
    +1

    Comment number 390.

    @moodymuppet

    'The best way is to live right next to where you work.'

    yeah, we tried this pre-1950 then they started closing down local factories e.t.c. and people had to be mobile to get a job - no petrol=no mobility=reduced job prospects=reduced economy =politicians lying about how wonderful it all is.

  • rate this
    0

    Comment number 389.

    During 12 yrs in fuel marketing I saw the tax mans greed reduce or wipe out small firms across the UK & ultimately a huge part of the UKs oil industry from circa 2005. Obvious to every working man & woman in transport or oil industries & beyond. The government allowed it, went with it, watched it and reaped short term revenue from it.
    Any claims to the contrary insult the public intelligence.

  • rate this
    +1

    Comment number 388.

    The office of fair trading is a well know joke, so not surprised they'd say this. The Government need to grow a spine and act on behalf of the poorly treated consumer.

  • rate this
    +4

    Comment number 387.

    Pre Recession I drove a car doing 300 miles a week and averaging 33mpg. I now drive less than 100 miles per and have a car doing 53mpg.
    Sorry Mr Chancellor, get money to look after your Rich Mates from somewhere else not me.

  • rate this
    +2

    Comment number 386.

    373.Britainsnotpleased


    Oh dear.

  • rate this
    +1

    Comment number 385.

    It costs me 50pounds to fill my tank, 30 pounds of which is tax, anyone else feeling completely ripped off by this disgraceful tax?

  • rate this
    +5

    Comment number 384.

    Well, well. What a surprise. Govt body finds there is nothing wrong with "the market".

    Cleverly, they mention the price BEFORE tax.

  • rate this
    0

    Comment number 383.

    The fundamental issue is that many necessity costs (fuel feeds through to transport costs, transport of food etc) have been relentlesly rising over past decade +. Yet, real incomes have staggered or declined (downsizing jobs etc). If majority of incomes kept pace with these costs (rents,food,energy, stelth taxes etc) the pressures would not b obious. Cheap Chinese imports + credit hid this reality

  • rate this
    +3

    Comment number 382.

    what a joke, its simple, we are not buying our own north sea oil, to many foreign oil companies export and we have to buy on the global markets. Functioning well; so why are some petrol stations around london charging £1.38 litre and in Cambridge its £1.43? and in North Wales its £1.41? There is plenty wrong with the fuel industry, the persons responsible at the OFT are a bunch of idiots

  • rate this
    +2

    Comment number 381.

    Ha ha ha ha ha ha ha ha ha ha ha ha ha ha ...........

    yet another government organisation with not a shred of credibility. Nor it seems integrity.

  • rate this
    0

    Comment number 380.

    ...before tax.

    Tax should not account for over half of the retail price of a commodity if you want to regard the market as "working well"

  • rate this
    +1

    Comment number 379.

    Was in Houston Tx last week...$50 for 16+ gallons of unleaded...what does our government do with all the £ raised on fuel? I am heartily sick of the way we are expected to cut back on our personal budgets whilst the government and the civil servants screw up time and time again with our hard earned £ tax contributions .... do they answer to anyone?

  • rate this
    +1

    Comment number 378.

    Yet another whitewash by the establishment for the establishment

  • rate this
    +3

    Comment number 377.

    Typical. Another government body missing the point.

    We don't have a problem with the prices the oil companies are charging, it's the extortionate tax our government is adding on top!!!

 

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