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 736.

    fuel tax is to blame for the high price, we already knew that, the government is trying to force us onto public transport to free up the overcrowded roads, trouble is that is also overcrowded, unreliable, filthy and not safe especially at night if u work shifts, not to mention over priced

  • rate this

    Comment number 735.

    Shame that the OFT didn't speak to the consumers, the same consumers that fund the OFT.
    Supermarkets have for some years now opened in towns with preferential planning permission, undercutting independant forecourts, then bumping prices back up when they close, blaming less competition.
    Then independants that have increased pump prices 3 times in a week on the same delivery
    Toothless OFT.

  • rate this

    Comment number 734.

    Yes it's working well, for the Oil companies and the Government's tax revenues.

  • rate this

    Comment number 733.

    heard this on French longwave radio

    Why not set the tax per litre in £and p each budget not a %. It lets the motorist know the price of fuel and means price fluctuations are limited to wholesale price not wholesale price +800% as at present

    The system would be more honest and show that oil companies get less than 1/4 per litre as bottled water companies despite drilling and processing costs

  • rate this

    Comment number 732.

    'Working well'... of course it is, how many other Industries would you see a £4bn fine be shrugged off as if nothing had happened. Remember, big corps don't pay tax on the full profits, only what it declares as a profit.

    This and all other Gov'ts going back to the 80's when Maggie gave away our Oil and the revenues it generated, have failed to protect the public they are supposed to serve.

  • rate this

    Comment number 731.

    "UK petrol market is working well...."

    Yes, for the petrol companies!

  • rate this

    Comment number 730.

    If the cost of fuel is down to a weak pound that does hit our IMPORT costs, but what about the North Sea Oil we EXPORT at a better margin? Does that not redress the balance or would the notion just be swept aside by the oil companies. And on the cost of fuel, why is it that Electricity charges increase because of the cost of oil & gas when that energy is HYDRO power? They can get away with it!

  • rate this

    Comment number 729.

    Just use red diesel! The rich are all on the fiddle, why is it that the poor can't benefit from tax avoidance!

  • rate this

    Comment number 728.

    This report cost how much to compile .. all i have to do is look at the price per barrel of oil and look at the price at the pump .. yet again another 2 fingers to johnny tax payer .. rip of britian .

  • rate this

    Comment number 727.

    How can OFT say little action is needed when you have two garages a few miles apart from the same company selling petrol at vastly different prices! They must have asked all the Chairman of the fuel companies to come to this conclusion!!

  • rate this

    Comment number 726.

    I think people are confusing two things, the cost of fuel and the role the petrol industry plays in keeping this cost high. Yes the UK has one of the higher fuel costs, but thats thanks to the previous labour government constantly putting up the duty.
    Thanks to Gordon's great giveaway for every liter you put in your tank, you are buying the Government 2!

  • rate this

    Comment number 725.

    When I started driving 5 years ago it was bout 80p/litre and 1/2 of that was tax. Now I understand we have the NHS,fire,military etc but I thought that was why we paid tax, national insurance, council tax, Value added tax, tv tax, car tax. Seems to me the government should knock back the tax on fuel as it is crippling us and look at their books more closely as there is a massive hole somewhere...

  • rate this

    Comment number 724.

    Why am I not surprised? Yet another 'report', with a meaningless result at extortionate cost. Something rotten in the state of Denmark?

  • rate this

    Comment number 723.

    it is fairer to tax people's income than their spending"

    That would be to reverse 34 years of shifting taxes from direct to more discretionary indirect taxes where one has choices about whether and how much one consumes. Advocate it but don't expect others to vote for it.

    " jim holland
    This is theft should not the PM be jailed"

    No, parliament is empowered to raise taxes it sees fit.

  • rate this

    Comment number 722.

    Showing the actual tax rate percentage on fuel recipes is an excellent idea. It will remind us every single time we buy fuel that we've just been the victim of an extortion racket perpetrated by the state.

    How else do could you describe a tax rate of 150%+?

    It's time we started to gat a LOT more vocal about this.

  • rate this

    Comment number 721.

    I'd have way more sympathy for all those moaning about the price of fuel if I didn't still see (an increasing number of?) massive 'off roaders' that never go off road and shiny 'stretch pickup trucks' that never go on a building site or farm blatting along as if fuel was almost free. I know that's not everyone by a long shot, but there's plenty with cash to burn, obviously.

  • rate this

    Comment number 720.

    To fill your tank you pay: £72.05
    You pay £0.67 less than average in your country
    Without tax, you would only pay £28.60

    Most expensive
    In Netherlands you would pay £8.38 more

    In Venezuela you would pay £71.13 less

    THAT'S FAIR?!!!!

    it's not so bad if with tax added on i'll pay say an extra tenner on top of the £28 but £43.45 in tax/vat.


  • rate this

    Comment number 719.

    Planethannet. You would manage to walk to 40 miles work or try to get the twice a day bus then? You need to realise that the World doesn't end at Watford, and that some of us don't have a "home counties" transport infrastructure. Don't be so condescing, you have NO idea of life outside your little subsidised life.

  • rate this

    Comment number 718.

    cockedup that one was supposed to say:

    can anyone else smell b.s again ?

  • rate this

    Comment number 717.

    With regard to Quentin Wilsons remark about fuel you dont have to look to far back when unleaded was more expensive than diesel but due to tax changes by Gorden Brown the tax on diesel was increased year on year as it was regarded as more polluting than petrol,tax has always been the issue.


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