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
    +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
    +46

    Comment number 701.

    I would love to be able to ditch the car but sadly I was made redundant and the job I landed ter 26 interviews meant travelling to work. There is no viable alternative to driving, public transport is expensive takes double the time and doesn't run at the times I need it to. Perhaps those who would like to see me ditch the car and get more fresh air would prefer it if I'd remained unemployed?

  • rate this
    -202

    Comment number 450.

    Ah, the poor motorist, with parking, road tax and speed limits, I don't know how they survive, poor things. Use your car less and do a bit of walking-the fresh air might blow some cobwebs from your brains. They conveniently forget we have some of the lowest fuel prices in Europe. I suspect if they were offered the Koh I Noor diamond for free they would complain it was the wrong colour.

  • rate this
    +52

    Comment number 404.

    Ok so if this really is working why is it the small company owned petrol stations are all closing down, yet there are more cars on the uk's roads today ?

  • rate this
    -35

    Comment number 254.

    The government may get a lot of tax from sales of diesel and petrol but if they did cut tax on fuel what would they increase the tax on to make up the shortfall, people expect a free NHS, child benefits and other government handouts but where do they think the money comes from. The best way is to live right next to where you work.

 

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