New fuel report offers no relief for motorists

Report says petrol industry is ‘working well’: What do you think?

Wednesday, January 30, 2013
1.47 PM

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.

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