Hard-pressed motorists in the UK pay some of the highest prices for petrol in the world - but a new study has found that oil companies and supermarkets are not to blame.

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Independent retailers had complained that oil companies and supermarkets had been using their scale to give themselves an unfair advantage, but the Office of Fair Trading (OFT) found no evidence of this.

A report by the regulator said: “The evidence gathered by the OFT suggests that at a national level, competition is working well in the UK road fuel sector.”

It found the UK has some of Europe’s cheapest fuel prices before tax.

It 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.

But the OFT found that fuel was significantly more expensive at service stations and was concerned that motorists were not able to see the prices until they had left the motorway.

OFT chief executive Clive Maxwell said: “We recognise that there has been widespread mistrust in how this market is operating.

“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.”

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”.

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.

“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 7p a litre since Christmas when refineries were saying they had a glut of petrol and demand had been hit by wintry weather.

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.

Prof Stephen Glaister, director of the RAC Foundation, said: “This report will give only limited comfort to the UK’s 35m 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.

“About 60pc 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.”

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.

What do you think of the report’s findings? Email reporter David Bale at david.bale2@archant.co.uk

14 comments

  • Working well, as what, a price fixing cartel? Petrol prices are on the up again, great news for profiteering oil companies and the spivs in the City manipulating future prices. Can't expect government to crack down when 60% of every extra 1p at the pump goes straight into their coffers. OFT findings? More like a whitewash to protect the myriad of vested interests.

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    Police Commissioner ???

    Wednesday, January 30, 2013

  • Doesn't that statement sum it up?'The UK has some of Europe’s cheapest fuel prices before tax' It's not the cost of the fuel its the flaming tax you pay, which show that 60 per cent of what customers pay at the pumps goes straight to the tax man. When drivers pay £30 at the till, around £18 of that is paid straight to the Exchequer, with only the remaining £12 covering the cost of the fuel – including just £1 to the retailer. Until this tax is addressed the recession will rumble and rumble on for decades, yes decades.

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    John L Norton

    Wednesday, January 30, 2013

  • @ John L Norton - If you want to see a reduction in the tax on petrol then it has to be increased elsewhere. What do you propose? Putting up VAT? Paying for your medical treatment? Personal taxation up by 5p in the pound? Let`s face it while everyone wants the state to look after them from the cradle to the grave, quite literally for increasing numbers of people, then we are stuck with it. Welfare doesn`t come cheap.

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    BG

    Wednesday, January 30, 2013

  • Doesn't that statement sum it up?'The UK has some of Europe’s cheapest fuel prices before tax' It's not the cost of the fuel its the flaming tax you pay, which show that 60 per cent of what customers pay at the pumps goes straight to the tax man. When drivers pay £30 at the till, around £18 of that is paid straight to the Exchequer, with only the remaining £12 covering the cost of the fuel – including just £1 to the retailer. Until this tax is addressed the recession will rumble and rumble on for decades, yes decades.

    Report this comment

    John L Norton

    Wednesday, January 30, 2013

  • BG if more revenue is needed then all the government needs to do is collect from the tax evaders like the big companies and the tax avoiders like the self-employed cash in hand merchants, yes you know who they are.

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    John L Norton

    Wednesday, January 30, 2013

  • There's always been a big difference in prices as regards where you buy fuel. Dereham area is always around 4p per litre more expensive than the Norwich area. The only consistance is in cental heating oil,where you get ripped off regardless of you live.The price of cental heating oil went up around 15% when the weather turned colder and is now 70p per litre. The pump prices did'nt go up 15%. Another rip off and maybe the Office of Fair Trading should turn their attention to the heating oil companies.

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    regandharry

    Wednesday, January 30, 2013

  • What happened to less MP's? a reform of both Houses, the fraud in central and local Government, some 2.3 billion, wasting money on Trident, an unusable weapon system, by their own Generals admission? never mind the motorists will pay and at election time we throw them some road repair crumbs, gosh BG, do you think we are all daft here?

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    ingo wagenknecht

    Thursday, January 31, 2013

  • How unsurprising. People of South Norfolk should also be reminded that in the autumn vote in the commons, Richard Bacon (Emperor Nero) actually voted for the increase in fuel duty that we were going to have last month but has now been delayed til the summer. His resignation would be a delight.

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    john smith

    Wednesday, January 30, 2013

  • @ John L Norton - If we are going to wait for big companies to cough up or those doing jobs for cash in hand to pay the right level of tax then there are a lot of old aged pensioners who are not going to get their state pensions. Petrol duty is a reliable source of income as is PAYE and VAT for the treasury. It may be an ideological wish for others to contribute but somehow I don't think that is going to happen anytime soon. P.s. Will the person who has never got a cheaper job by paying cash please stand up!

    Report this comment

    BG

    Wednesday, January 30, 2013

  • Working well? For the government and the oil companies. But not for the poor consumer. When the price of oil falls ,it is not reflected at the pump. When it rises ,it is very soon added to pump prices. At any given time there are billions of gallons of oil in transit. Bought, very often, at a lower price and sold at the higher price. Same as at the pump ,whatever is in the tanks is sold at the higher price even though bought cheaper. The biggest culprits in the whole sorry business are the manipulators of the price, the middle men. The government with its disgustingly high tax could alleviate the problem and boost the economy at the same time. The UK politician has one mind set tax,tax and more tax. What a novel idea cut taxes drastically .Let people save or spend at their choosing. What better way to boost and economy that giving people money to spend. After all it is theirs in the first place.

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    norman hall

    Wednesday, January 30, 2013

  • Realistically, the report was never going to say otherwise, was it? Free martket governments will never admit that the free market doesn't work.

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    marty r

    Thursday, January 31, 2013

  • BG, I wonder who you work for. John L Norton makes valid points. Why do taxes have to raised continually? Government wastage runs into billions annually. This is never addressed by any government. Billions of our pounds are scattered world wide without any result. How much has been spent on Afghanistan alone. In the guise of bring democracy, hunting Al Quada or maintaining British security. Take your pick. As all have been used as an excuse to explain a totally impossible situation. This is one example of wastage. There are so many others home and abroad , it would a book to complete the list.

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    norman hall

    Wednesday, January 30, 2013

  • Fuel price is very good, Its the TAX that's the killer

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    ggj666

    Wednesday, January 30, 2013

  • The planned rise for 1st Jan 2013, which was delayed from Aug 2012, has been scrapped. The planned rise for April has been postponed until September 2013. It does pay to shop around. BP at Acle today was 137.9. Just further up the A47 towards Norwich Shell was 131.9p. Someone is making a bob or two out of us.

    Report this comment

    BG

    Wednesday, January 30, 2013

The views expressed in the above comments do not necessarily reflect the views of this site

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