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 956.

    Another sham report the fact we say we have one of the cheapest fuel costs 'before tax' is a idiotic comment and only something the OFT could come up with. And to the green fanatic idiots who say 'use public transport' who obviously only live in the centre of a town and have probably have never got out of London further than Crouch End get back into the real world.

  • rate this
    0

    Comment number 955.

    I completely agree with Quentin Willson (Hard NOT to agree)

    "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

  • rate this
    +1

    Comment number 954.

    Did anyone expect anything else? Think back to Lord Hutton and any takers on bets of the colour of the Iraq report (yes it's still awaited).

  • rate this
    +2

    Comment number 953.

    To all the clever so and so's who preach "you should live where you work" GET REAL! Most couples both need to work to survive in today's economy. There is a job shortage and the likelihood of both getting reasonably paid jobs in the same locality is pretty damn low. To those who bleat about us having low fuel prices GET REAL! Tax included we have pretty much the highest fuel prices in the world!

  • rate this
    0

    Comment number 952.

    Yet another overpaid official talking through their backside. One who probably has an all expenses paid job, does not know anyone who has not also got the same, the petrol companies and their shareholders will just carry on shafting the public just the same as they always do.

  • rate this
    0

    Comment number 951.

    "David Horton
    The "this tax or that tax" analogy is weak"

    The government spends about £700B and raises ~£580B in taxes. Fuel tax just goes into the general pot. If they reduced fuel tax they'd have to raise other taxes (or cut spending or increase borrowing) to compensate. Unless the tax cut here increased economic output so other taxes related to that output increase as a bi-product.

  • rate this
    +9

    Comment number 950.

    Surely, there is something VERY wrong when taxation accounts for MORE than 50% of the total price per item! especially an essential like fuel! It would appear that our blundering politicians are as incompetent as ever! Gotta luv Britain!

  • rate this
    +1

    Comment number 949.

    Someone got a nice fat cheque from the oil companies. Lot of that going round

  • rate this
    +2

    Comment number 948.

    Well what do you expect? The big boys know that the hydro tech they've been holding back for years will become available in the not so distant future; so they're raking in as much as they can from the Oil industry before it becomes obsolete.
    It's all a huge scam.

  • rate this
    +2

    Comment number 947.

    What people forget is that when a price rise is announced the guy that owns the petrol station will make an immediate profit on the fuel, as he will not pay the increased rate until the next tanker arrives. The reverse is true on a fall in price. What is needed is 'real time' pricing and payment between the pump and the provider, with broadband and a few computers this should be available!

  • rate this
    +1

    Comment number 946.

    Shocked at the OFT siding with the big oil firms? Just how many MP's have interests in the market place I wonder...

  • rate this
    +2

    Comment number 945.

    Bikes are cheap?

  • rate this
    +3

    Comment number 944.

    OFT = onerous fuel taxation

  • rate this
    +3

    Comment number 943.

    What a load of crap.
    As Quentin points out, why is diesel more expensive than petrol (is cheaper to produce and used to be cheaper than petrol years ago) ?

    Why do forecourts from the same brand have different pricing policy (supermarkets don't sell bread at different prices nationally)?
    and why the seemingly random daily price shifts ?

  • rate this
    +4

    Comment number 942.

    450. planethanet
    We don't have the lower fuel prices in Europe (we only among the lowest BEFORE duty and VAT). After duty and VAT we have the second highest diesel in Europe. I used to cycle when I had a 12 mile commute. Now its 20 miels and the car is the only option. Perhaps it's you that needs the cobwebs blowing from your brain?

  • rate this
    +3

    Comment number 941.

    The holier-than-thou folk on here saying 'use your car less' are talking garbage.

    Does anyone except the wealthy use a car other than for necessity these days.

    I commute 35 miles to and 35 back every day. There is no viable alternative. The first train of the day takes almost two hours with changes & arrives at the nearest station 3 miles away from work 15mins after I am supposed to start.

  • rate this
    +1

    Comment number 940.

    Whitewash.

    Anyone who drives a car knows this is a load of rubbish. I used to live in Shetland (£1.50 per litre), then the government introduced a scheme to lower the tax on petrol in the islands (Shetland, Orkney, Western Isles and Scilly Isles) because they realised prices were too high there.... guess what?

    The petrol price stayed the same. Suppliers put their prices up by same amount.

  • rate this
    +2

    Comment number 939.

    Our supply of go-go juice will eventually dry up. If diamonds were plentiful and you could dig up them up everywhere, they would be dirt cheap. I'd be lost without my car and resent the fuel prices, but have recently changed it for a small economic model and am saving £30 a month compared to my old one. Driving sensibly has also saved me a huge amount of fuel (money).

  • rate this
    +2

    Comment number 938.

    I wonder how many of those agreeing to fuel price rises actually pay for their own fuel? I bet you Anne Pope doesn't pay for her own fuel....just like the rest of the parasites at parliament.

  • rate this
    +5

    Comment number 937.

    This government should be referred for further investigating. Explain.

 

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