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 476.

    @ 254 moodymuppet

    "The best way is to live right next to where you work"

    A fair and realistic point. Its no coincidence that Planning Permission for new developments in urban areas frequently has zero car parking allowance, or space only for Pool Cars. Whats more, costs of running a private vehicle rises year-on-year. People will dismiss you comment now, but that is increasingly looking likely.

  • rate this

    Comment number 475.

    No surprise at all. VAT on top of 60% fuel tax is indeed obscene. The discrepancy between diesel and unleaded pump prices is also inexcusable since diesel is less refined and one would image therefore cheaper to produce. The OFT will know this and will have been "careful" in how they present their results to skew attention away from the real issues which they presumably can't or won't tackle.

  • rate this

    Comment number 474.

    ....remind me - who pays the wages of this organisation??

  • rate this

    Comment number 473.

    I wonder what percentage of fuel duty is actually spent on road infrastructure and reducing the environmental impact of using our roads?

  • rate this

    Comment number 472.

    It probably didn't occur to these intellectual giants that the price of petrol they saw displayed in the garages on their fact finding mission to to the vineyards of Provence was in euros.

  • rate this

    Comment number 471.

    Austrailia had the same problem, so they passed law to make the wholsale price public, Now there price goes up and down all the time.
    This has been a whitewash to protect tax revenue

  • rate this

    Comment number 470.

    Hundreds of people will moan, write comments about how the government is working and their sh*t policies and blah blah blah.
    Look at other countries where people come out on streets and protest, let the govern know that you are not happy with their policies and let them change, if you don't like the govern bring it down. Writing comments by sitting behind your desk is not going to change anything

  • rate this

    Comment number 469.

    A tax on a tax is not only obscene, it is against EU law. "

    In that case you are entitled to ask the European Commission to take the UK government to the European Court of Justice. You might even be able to bring a case yourself but might like to consult a lawyer specialising in tax and EU law first.

  • rate this

    Comment number 468.

    OFT are just a PR company for the government.

    Despicable bunch of spineless and useless oxygen wasters.

  • rate this

    Comment number 467.

    "The evidence gathered by the OFT suggests that at a national level, competition is working well in the UK road fuel sector,"

    I just gathered some evidence - all the different petrol stations in my area pretty much have the exact same prices to within a penny, and always have been since I can remember too.

    If that is proof "competition is working well", then I guess I must just be a bit stupid.

  • rate this

    Comment number 466.

    Seems that all the Quangos & Ombudsman are afraid to take on big businesses. There seems to be an implicit code since this Govt came to Office that "thou shalt not upset major Corporations" as no doubt many donate to the Tory party. So all these "enquiries" and "investigations" are a complete waste of Public money until we have a more transparent Govt genuinely interested in the rights of people

  • rate this

    Comment number 465.

    OK so they say its working correctly, lets all get together and only use one retailer for fuel. The others will be very quiet and have to reduce the fuel price.
    Or get rid of the current government!

  • rate this

    Comment number 464.

    Well, it is one thing the extra we have to pay on fuel personally but it seriously impacts delivery charges on food and other items. We will be paying far more for this increase than many people realise !!!

  • rate this

    Comment number 463.

    If someone arranges a large scale protest, I for one am willing to do my part. In the comments here that I am reading, I am feeling hope. Seeing others with the same opinion 'something must be done' fills me with hope.

    Something I have not felt very much of, since winter 2010... I feel silly for writing this, but if I hesitate, and censor myself, then what good is hope...

  • rate this

    Comment number 462.

    The truth is - we live in a country full of welfare scroungers and this is how the government pays for the cost of that welfare. No government will ever end the fuel duty. We simply can't afford it. Get rid of the scroungers.

  • rate this

    Comment number 461.

    This is complete rubbish. Supermarkets should not be allowed to charge different fuel prices according to their location. There are cases where supermarkets in small towns close to motorway junctions charge high prices; therefore the price is not related to difficulty in delivering to remote locations.

  • rate this

    Comment number 460.

    Tax should be reflective of the product being sold - tax on fuel and cars should go on road maintenance etc, tax on cigarettes, alcohol, unhealthy food to the NHS, so on and so forth, if there is a shortfall elsewhere then tax needs to be increased in that area - all public services should be funded from standard tax on wages, if this doesn't work something in fundamentally wrong (sack some mp's?)

  • rate this

    Comment number 459.

    Can those who don't like tax on fuel tell us what should be taxed instead and how we get a concensus?

    Fuel has a polluting effect on the environment and some pressure is required to encourage either less travelling or more efficient engines.

  • rate this

    Comment number 458.

    Why are you all moaning? Dave has in public announced that he is quote "a low tax tory" well since he has been in power, we have seen any tax that effects the poorer people rise, whilst the rich are doing 'very nicely thank you' Surely even someone as hypocritical as Dave must realise that the less well off pay the same as the rich for their petrol/diesel, & few get tax relief on what they spend!

  • Comment number 457.

    This comment was removed because the moderators found it broke the house rules. Explain.


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