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 416.

    'UK petrol market working well'

    What just like the trains!

  • rate this
    +3

    Comment number 415.

    This is the "competition" where one site loers/increases it price and the one on the other side of the road does as well.
    This is the one where within a few hours ALL the petrol stations are charging the same!!!

    Competition.

    Tell me another, I havn't laughed so much in ages

  • rate this
    +2

    Comment number 414.

    I do agree with 341 Philjer, the tax on fuel, pay etc would be more acceptable if used for communal purpose. The truth however is The Great Benefits Scam: the biggest recipients of tax ie benefits are the people who need it least: Landlords!
    But we do still use our cars too much, get fat, ill, and give our kids athsma with our fumes. We're all horrid really.

  • rate this
    +4

    Comment number 413.

    Diesel is more expensive than standard petrol for one simple reason - it's taxed higher.

  • rate this
    +2

    Comment number 412.

    Before it became more popular diesel was cheaper than petrol. Now it is popular it is more expensive than petrol. Are there any valid reasons for that?

  • rate this
    +3

    Comment number 411.

    364. Howesyourview

    You have just put forward a compelling argument that high taxes on fuel are NOT a tax raising measure but a disincentive to use it. Indeed, last year the AA argued that Osborne would get at least a billion more in tax if he reduced the price of fuel. He didn't. Similarly linking VED and company car tax to CO2 emissions has REDUCED the tax raised rather than being tax neutral.

  • rate this
    0

    Comment number 410.

    This report is a utter farce.

  • rate this
    +3

    Comment number 409.

    Competition working well is it? For the one's raking in the big profits maybe. You know the type Speculators, oil barons and governments.

  • rate this
    +2

    Comment number 408.

    The same OFT that decided after a three month investigation that there was nothing wrong with the way Pub Companies set beer prices, despite the fact that it is cheaper for me to buy a barrel retail than it is for the licensee of my local to buy one off his PubCo. All they had to do was declare the practice of tied supplying illegal and the price of a pint would have halved. Waste of space!

  • rate this
    +8

    Comment number 407.

    My local Tesco sells two loaves of bread (as an example) for £2.20. In the Tesco 20 miles away the same two loaves of bread cost £2.20.

    My local Tesco sells diesel for £1.419 per litre, 20 miles away it's £1.379 per litre, why the difference?

    Bread (and other same-price products) and fuel are both delivered by road in a truck to the retailer. Road fuel pricing stinks of corruption.

  • rate this
    +5

    Comment number 406.

    I don't think any one has an issue paying tax (except for the wealthy and Amazon and co. ), the issue is fuel is over taxed, which impacts the poor and working class, the government can't hide behind the emissions excuse, if Britain didn't produce a single CO2 molecule ever again it wouldn't make one difference to the planet, we hardly contribute on a world scale.

  • rate this
    +1

    Comment number 405.

    What a utter waste of time and money, but no surprise!!

  • rate this
    +52

    Comment number 404.

    Ok so if this really is working why is it the small company owned petrol stations are all closing down, yet there are more cars on the uk's roads today ?

  • rate this
    0

    Comment number 403.

    352.madmackram
    "I don't believe it" This can't be the real report.......

    Its not. This is the report the Politicians want you to see & beleive not the real, factual report the Public actually need.

    Make no mistake - Career Politicians have decided on the wording of this report. It seems the horrifically expensive Leveson enquiry into Media standards did not address our Politicians behavior

  • rate this
    +2

    Comment number 402.

    Thank goodness they told us that petrol prices are higher at service stations. I hadn't noticed that rip-off going on for the last 20+ years. New signs to tell everyone the price will be a real boon to the motorist. Much better than the silly alternative of having the service stations actually charge what everywhere else does.

  • rate this
    +3

    Comment number 401.

    A couple of years back the price of oil dropped to $40 a barrel
    The price at the pumps stayed at £1++. a litre.How much more evidence
    do you need! This is a complete whitewash.

  • rate this
    0

    Comment number 400.

    Most of the price of fuel is tax

  • rate this
    +2

    Comment number 399.

    Quentin Wilson just likes the sound of his own hyperbole. If a more balanced view of the market had been given, he might have helped people understand the real dynamics. For example, does the average driver think about the pound v dollar exchange rate position (UK fuel cost is derived from the crude oil price in US dollars) - remember the £ has dropped by more than 3% this year already.

  • rate this
    +1

    Comment number 398.

    If Supermarkets can offer 10p off a litre when you spend £50 on food then i'm sorry pertol is over priced. The Supermarkets will rarley lose money to attract customers so if they can offer 10p off then could even lower prices by 5p off and still be better prices than everyone else

    The real problem is the oil companies selling to the supermarkets will determine the selling price in the contract

  • rate this
    +4

    Comment number 397.

    Jumping on the bandwagon slightly - but, seriously, why such a high tax on something essential for people being able to travel to work? If fuel tax went down by even a small amount, I am sure many unemployed would consider looking for job opportunities further a field. But hey, as long as cigarettes and alcohol are still affordable for the unemployed it is fine.

 

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