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
    +2

    Comment number 496.

    Basically the OFT were warned by the Government to keep their investigation as simple and non-pervasive as possbile. Why? because the fuel duty is the most lucrative income for HM Treasury.

    HM Government don't want to lose a single decimal placed penny from this scam. Our local BP forecourt has raised it normal unleaded petrol litre price from 131.9 to 135.9 so there we have the 4p increase.

  • rate this
    +2

    Comment number 495.

    Don't forget, after you take on board a 4p increase there is another 0.8p for VAT, so rounded up it's actually a 6p increase.

  • rate this
    +4

    Comment number 494.

    Well, this is good news.

    I won't feel quite so bad now when paying £65 to fill up my small family hatchback. Not now that I know how good a deal we're all getting!

    Thanks OFT :-)

  • rate this
    +1

    Comment number 493.

    YES its working well ,if you have a nice income.Tories have trashed their austerity with getting over greedy with tax.
    Nearly everyone is hurting except top end earners .

  • rate this
    +4

    Comment number 492.

    If I could help myself to 70% of the gross sale price of something every time it is sold, then I would definitely say the market was working effectively.

    I'd also do everything I could to ensure that people always needed my product (rubbish public transport alternatives) and that any competitors were kept out of the market (no hydrogen or solar power, thanks).

  • rate this
    +2

    Comment number 491.

    As more and more drivers opt for electric cars presumably the tax on electricity will go shooting up!
    How will that be managed - or will all electricity be taxed more and more?

  • rate this
    0

    Comment number 490.

    the market is working normally for the people it has always worked for ie - not the little man

  • rate this
    -1

    Comment number 489.

    The OFT investigation seems like a waste of money to me. We already knew that petrol prices were 90% tax and the underlying cost was very competitive. The problem is that they make so much money from it that it will take years to replace the income from somewhere else due to the mess the economy is in. There is nothing else to tax and nothing else to cut spending on.

  • rate this
    0

    Comment number 488.

    We are continually told that the high tax is to "save the planet".

    It costs me (using the BBC calculator) £52.00 to fill my small car. In Venezuela it would be 80p, So we penalise our population and industry whilst the rest of the world laughs at us.

    Even Cyprus and Malta, who have to import every drop of fuel are cheaper than the UK!

  • rate this
    +1

    Comment number 487.

    I got on my bike and travel 90 miles a day (by car) to a job that pays half the wages my previous job paid (another company that went bust). Do I have any money left to buy anything ...... er no I don't - so much for working pays. Drop the fuel tax please.

  • rate this
    +3

    Comment number 486.

    Jonnathan Halling-Graduate Pillock

    We Civil Servants at all levels are all that stands between the taxpayer and Anarchy. We are expected to RUN this country with continual changes to policy, massive cuts in headcount and a total reliance on our ability to operate in a fast changing world with exempliary professionalism. Your argument is with the dubious profession you are going to join.

  • rate this
    +1

    Comment number 485.

    I just laugh at all of the ecowarriors on here. If it wasn't for me and my car, there would be no taxes and therefore no benefits for all you nutters

  • rate this
    -1

    Comment number 484.

    The answer is suprisingly simple - have the pump price accurately reflect the price of the goods themselves and add the taxes at the till.

    When faced with the reality of the situation MP's would soon find themselves being asked questions of directly by their constituents that they cannot answer

  • rate this
    0

    Comment number 483.

    What annoys me, is successive governments use the euro-stick to beat us into submission and blame Europe for imposing bizarre taxes or charges on us due to parity, however it doesn't work the other way when it comes to the high taxes we pay on fuel. Where's the parity there?

  • rate this
    0

    Comment number 482.

    How can our fuel prices with Europe without including tax?! "Here's half the story and these are our findings!"

    Is there a regulator for the OFT?

  • rate this
    -1

    Comment number 481.

    254.moodymuppet

    Not always possible to live near where you work (hardly any jobs in my local area unless I want to work as a temp). The money needed should be spread fairly in tax but not by just targetting the motorist who already paying alot for substandard roads, one way is cut the Billions we give to the EU.

  • rate this
    -1

    Comment number 480.

    Wonder where the OFT obtained the whitewash from! Or is this a report that simply glosses over what really happens.

  • rate this
    -1

    Comment number 479.

    Quentin Wilson and the rest of the car/FTA lobbists would still be wining on if the price of fuel was still £1 per litre.

    Compared with most of the world its still cheap so please shut up and buy a smaller car if you're that bothered.

  • rate this
    +3

    Comment number 478.

    The only issue here is how the oil co's act. But they are there to make money !
    When it comes to excise duty/VAT you can't have your cake and eat it too
    In the last budget the chancellor projected Health costs £130b; Social Protection (Tax credits, housing and child benefits) £207b; Education £91b ; Defence £39b
    If you can't live with taxes then don't vote for spending governments.
    Simple.

  • rate this
    +4

    Comment number 477.

    "Outside the Marginals
    1 Minute ago

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

    The fairest tax would be an increase in income tax. We should be taxed on what we earn, not on what we spend

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

 

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