Newsbeat guide to... fuel prices
- 30 January 2013
- From the section Politics
A report into the price of fuel says, despite complaints, motorists are being given a fair deal.
The Office of Fair Trading (OFT) says although there is widespread distrust in the way petrol and diesel prices are set it's found no evidence those in the industry are responsible for significantly higher prices at the pump.
The report also dismissed claims independent garages were being pushed out of business by supermarkets or that prices stayed high when the underlying cost of crude oil dropped.
The AA has complained previously that the fall in wholesale price at the end of 2012 hadn't been passed on to motorists.
The OFT has also said there is enough competition in the £32bn market.
Who decides the price of fuel?
Prices can be influenced by other factors such as the price of crude oil, exchange rates and taxes.
The Treasury charges approximately 60% tax on fuel.
That means roughly 82p on every litre of fuel bought is tax.
Supply and demand will often determine the price of fuel.
If there is greater demand for fuel then there will be an increase in price.
Why do different petrol stations charge different prices?
If a petrol station is close to another one then there is greater competition between those outlets than an isolated forecourt.
Motorway fuel stations are considerably more expensive because of their convenience and most are open 24 hours a day.
Some petrol stations in the UK are run as franchises which means that although they may carry the brand name of a big oil company they may operate independently and be owned by individuals rather than the company themselves.
This means that individual forecourt managers are free to set their own prices.
What's the best advice for motorists?
There are lots of ways that you can help yourself.
Vicki Burn from the RAC recommends following some of the following tips:
1. Ask if your journey is necessary. If it is, plan ahead.
2. Can you travel at off peak times? Congestion, traffic jams and road works can all eat up fuel.
3. Think of revs as pound signs - the more you rev the more it will cost you in fuel.
4. If you tend to be an urban driver, only have half a tank of fuel - less weight will help you save money.
5. Shop around. Use price comparison websites to find the cheapest fuel near to where you live and for your journey. By planning ahead you can work out the cheapest places to buy.