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 456.

    40 Minutes ago
    “… The best way is to live right next to where you work.”

    I conclude that either you don’t work or you have a cushdy job for life in the civil service.

    The ‘flexible workforce’ get made redundant every 3 to 5 years. You can’t move house that often. Stamp duty (another tax) makes it financially impossible and the next job may be 50 miles away.

  • rate this

    Comment number 455.

    It's too easy for the government to boost their capital, by adding 1p to the price of fuel, they should tackle areas where we can make decent capital gains - Changing the laws that force companies like Amazon to pay tax instead of putting them in a room and telling them how naughty they are, charging foreigners to use our roads, I pay tolls in France, dealing with carrousel tax fraud & tax evasion

  • rate this

    Comment number 454.

    According to the fuel calculator link I pay £5 over the UK average to fill up and more than the rest of the world.

    £85 to fill up
    £50 of which is fuel tax

    Not sure how the government can justify 140% fuel tax, on top of ever increasing car tax??

    Seems to me that there's something very wrong here

  • rate this

    Comment number 453.

    The U.K. Spring?

    Could not come soon enough....

    I for one intend to be on the front line to get these morally-repugnant vermin in suits out of our society.

  • rate this

    Comment number 452.

    OFT has been fed B***s**t, by those who know how to hide the true picture.

  • rate this

    Comment number 451.

    Where i live BP is always 2p more expensive than all the others. Why? is BP not british?

    As for tax, its a joke. Only about 40% of the road tax is spent on the roads so i hate to think where the billions from Fuel tax goes although looking at the increasing amount of new social housing in my area i can guess!

  • rate this

    Comment number 450.

    Ah, the poor motorist, with parking, road tax and speed limits, I don't know how they survive, poor things. Use your car less and do a bit of walking-the fresh air might blow some cobwebs from your brains. They conveniently forget we have some of the lowest fuel prices in Europe. I suspect if they were offered the Koh I Noor diamond for free they would complain it was the wrong colour.

  • rate this

    Comment number 449.

    Perhaps if the government would collect the tax from the likes of Starbucks, Amazon et al, they wouldn't need to tax fuel so highly.

    Unlikely though, it is much easier going after the motorist...

  • rate this

    Comment number 448.

    @414. John from Poole
    Re benefits scam - landlords raking it in
    Yup, you are right. Thatcher (yes the princess of darkness) started this. Get rid of council housing and provide 'private' landlords with rent. This has two effects - both harmful. First the rich get richer. Second house prices shoot up.
    If you have capital its a great wheeze, only the rich have capital

  • rate this

    Comment number 447.

    The great fuel stitch up,
    The Government will keep the tax at astronomical prices as we have no other choice.

    Odd isn't it how peak travel to work by train is still more costly than running a car (inc insurance/tax/fuel)
    Why no economies of scale in the railways?
    Oh yes as it's not in the Government's interest to get ppl out of their cars.
    Surely time we all voted UKIP or anyone but con/lab/lib

  • rate this

    Comment number 446.

    A tax on a tax is not only obscene, it is against EU law. This OFT study smacks of widespread corruption, complicitness with the oil companies and the tax-grabbing government. At the worst complete incompetence. And to moodymuppet, if we all lived where we worked, London would be as crowded as a termites nest. Muppet!

  • rate this

    Comment number 445.

    moodymuppet . Get in the real world my friend. I wish I had the chose to work next to where I live - but due to the job situation I have to travel 90 miles a day to get to and from work on half the money I was on in my previous job (before it went down the pan)., and before you say why not just move to where you work - I have a family with a daughter in a school she loves - so not really an option

  • rate this

    Comment number 444.

    Surely no-one can take this seriously. It is a whitewash, a cover up, the fuel establishment agreeing amongst themselves that nothing is wrong and business as usual can continue. That business being screwing the motorist at every opportunity.

  • rate this

    Comment number 443.

    Plebs stop moaning - If me ( Cameron) and Cleggy want to rip you off -
    TOUGH.We get a buzz from widening the class divide and the more misery we can inflict on you the better.You have never had it so good and we are all in it together.He he he he he. Oh and doff your caps in future -

  • rate this

    Comment number 442.

    Yet another ineffective government quango telling us were getting a good deal. How can a tax on a tax on a tax be fair. I think the best deal we could have is to scrap the elite boys clubs (quangos) and put some genuine monitors with teeth in place. No wonder our economy is stagnant.

  • rate this

    Comment number 441.

    If only Dianna was here.

  • rate this

    Comment number 440.

    Perhaps reducing the tax would be a great way to shake up the economy. It would only benefit businesses and people that work already and would boost profits/money in pockets.

    That money can then be put back into the economy again from the ground up.

  • rate this

    Comment number 439.

    A quick browse of the Brent Crude history and the cost of petrol at the pumps suggests that the OFT are not correct. In Aug 08, the % of tax in the cost of fuel was 57.5% and the equivalent % in October 2012 was 58%. Brent Crude cost around $140 a barrel in Aug 08 and $110 a barrel in Oct 12. The cost of petrol was £1.13 a litre in Aug 08 and £1.38 in Oct 12. The sums don't seem to add up.

  • rate this

    Comment number 438.

    All this report has done has highlighted just how much the government are taxing us to death for petrol. And for what? Cuts to just about every public service? It's pathetic.

  • rate this

    Comment number 437.

    they go on about Italy being more than us, but look at the NON oil producing counties that are a lot cheaper than us, in ALL the arabic speaking states the diesel and pertol is as cheap as Venezuala, Palestine and Morocco are also very cheap


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