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 1016.

    974. Pedicabo consequentias
    "I don't understand the problem some people seem to be having understanding price differentials."
    To supply a petrol station in the sticks will cost more than one elsewhere. Supermarkets subsidise the price so you spend in their shops, which is unfair to those who don't use private transport. Just as small Tesco's for example charge more for goods than large ones.

  • rate this

    Comment number 1015.

    What rubbish! Oil companies put prices up at will,even when whole sale prices go down,the government takes so much tax from this product that putting taxes up would cripple the economy even more.Drivers,nearly all of us, are being financially raped by the oil companies and the government,it's a disgrace.

  • rate this

    Comment number 1014.

    "912.Sue Doughcoup
    As I keep saying on motoring HYSs it is not luck, it was a lifestyle choice when I moved 24 years ago. Some people choose leafy suburbs with little access to PT, I chose to live in an urban area but close to amenities."

    So why do you keep whingeing about others lifestyle choices on every HYS?
    You really are full of resentment aren't you?

  • rate this

    Comment number 1013.

    Putting UK tax aside, I think we have to look to the EU's 2011 Free Trade Agreement with S.Korea as a significant factor supporting crude prices in Europe. This has led to the regular shipment of North Sea crude oil to Asia which in turn supports benchmark Brent crude and related crude prices. Sad to say, the EU is partially to blame for adding to oil costs in Europe..

  • rate this

    Comment number 1012.

    Two things to realise.
    1) to reduce taxes you need to reduce spending and/or debt repayments. Politicians hate cutting things as it loses votes.

    2) Increasing income tax = voters more likely to change their voting pattern. Increasing indirect taxes doesn't lead to people changing who they vote for. So you get rises in Fuel, VAT etc.

  • rate this

    Comment number 1011.

    We have a cartel in the petrol market just like many other areas of Monopoly Britain ! the OFT are a joke just a toothless waste of time and part of the problem not the solution/ add to that a government desperate for easy revenue and the motorist is the natural target. Only way out of this to is to stay in all your life or walk ! "you can't milk a cow that won't come in from the field"

  • rate this

    Comment number 1010.

    I go by a petrol station on my way to work. The price goes up a few pence each time but never returns to what it was before the increase. Up 4p down 1p, up 3p down 1p and so on. Tesco's is the cheapest.

  • rate this

    Comment number 1009.

    if it was £199.9 OR £5.99 A Litre we would still buy it until we the people do something it will never change same as ever sit back and moan see you on here when it hits £2.00 a litre for another moan

  • rate this

    Comment number 1008.

    Is anyone actually surprised by the findings?

    It might as well be called the OFT Report into Fuel Prices sponsored by BP.

    The fuel prices rise the day after the price of oil goes up but any decrease takes weeks to materialise.

  • rate this

    Comment number 1007.

    Costs to take the train or bus vs. car and back

    To nearest town: Bus £2.50, Train: N/A Car

  • rate this

    Comment number 1006.

    I bet Dave wears a Stetson and shouts YeeeHaaaw behind closed doors.

  • rate this

    Comment number 1005.

    Lies lies lies lies!!!

  • rate this

    Comment number 1004.

    Maybe if the government stopped doling out to all those people who choose not to work and started taking some of the tax of fuel they might actually encourage people who do work hard for their money to travel a bit more therefore making up the shortfall??

  • rate this

    Comment number 1003.

    If the government wants to see growth then I would say the first step to growth would be cheap fuel. If this country had cheap fuel prices then pretty much everything would fall in price. More people then have money to spend and less expenses. Stop with heavily taxing important stuff like fuel and reduce expenditure on useless stuff...

  • rate this

    Comment number 1002.

    I just don't get all you whiners.
    The cost fuel in the UK is so high because of tax
    The UK has a huge fiscal deficit, mainly due to government overspend which was a result of the last 'governments' incompetence on fiscal matters
    We cannot, at the present critical period, lower that tax, as much as majority (including the present government ) would like us to
    We have sort out the mess left us first

  • rate this

    Comment number 1001.

    let's live closer to work or work from home. Buy food from local suppliers and local markets. Grow our own were ever possible. It's the return of the Middle Ages

  • rate this

    Comment number 1000.

    This is somewhat akin to the well known fact that we had one of the nicest countries in the world until we applied a government to it.

    Or do we have one of the highest incomes in universe before tax?

    I wish I could get a job doing these completely missing the point reports - We could all say something was perfect if it wasn't for something else that made it NOT !

    You couldn't make this up !!!

  • rate this

    Comment number 999.

    With a 60% tax on the underlying there is plenty of manoeuvre for reducing the burden on the motorist/haulier without hitting the suppliers profits. But my guess is, HM Gov will remain strangely quiet and keep their heads down and let the industry take the flak, as they always do.

    Not sure why OFT were investigating wholesalers/retailers; it should be the SFO investigating the government.

  • rate this

    Comment number 998.

    Of course diesel should be more expensive than petrol - it's a filthy fuel and the people who use it should contribute to the welfare of the people who are adversely affected by breathing in their toxic nitrous fumes. Petrol is much cleaner in this respect, so I really don't understand why the government penalises petrol uses and favours diesel users. Pollution is not just about CO2,

  • rate this

    Comment number 997.

    978. Dave
    What has before tax got to do with it, when the tax is added is where the comparison needs to making"

    The OFT report was to ask 'is petrol price competition working in the UK?'. So, the pre-tax prices are meaningful. The fact that pre-tax prices are some of the lowest in Europe suggests that competition between UK companies is working

    That is what the report was trying to find out


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