Anger as OFT rules out fuel market probe

News Reporter

Thursday 31 January 2013

Campaigners say they are bitterly disappointed the competition watchdog has ruled out a full investigation into the fuel market after concluding high petrol prices are the fault of taxes and the cost of crude oil.

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The Office of Fair Trading (OFT) said competition in the sector was working well and there was very limited evidence pump prices rise quickly when the wholesale price goes up but fall more slowly when it drops.

Angry campaigners, who had called on the OFT to announce a full investigation into the sector, said drivers would feel let down.FairFuelUK spokesman Quentin Willson said: "UK consumers will be bitterly disappointed. The nation will feel let down. Quite frankly, I'm shocked. "The OFT investigated in 1998 and now have done so again. "Every motorist and business in Britain instinctively knows that something's not right. "The Americans and the Germans are holding inquiries – why aren't we?"The OFT has failed to address the key issues of why diesel is more expensive than unleaded 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, in the same area."They did not address the whistleblower evidence of potential rigging of the oil commodity market. Where is the fairness in all of this?"The OFT's report found the UK had some of the cheapest pre-tax road fuel prices in Europe, noting that in the 10 years to 2012 pump prices increased from 76p per litre (ppl) to 136ppl for petrol, and from 78ppl to 142ppl for diesel, caused largely by an increase of nearly 24ppl in tax and duty and 33ppl in the cost of crude oil.Its analysis of the relationship between retail and wholesale prices at a national and local market level, as well as the relationship between crude oil prices and wholesale prices at a national level, yielded "very limited evidence" to support claims of unfair pricing.The report found that in August 2012 petrol was around 1.9ppl higher in rural areas than in urban areas, and diesel around 1.7ppl more expensive.RAC technical director David Bizley said: "We're disappointed to hear the OFT will not be launching a full-scale review of petrol and diesel pricing in the UK. We have campaigned long and hard for greater price transparency and will continue to do so until this is recognised as a serious issue."AA president Edmund King said the OFT saw the fuel pricing market as competitive "but this clashes with drivers' frustration on the forecourts". He said: "If fuel pricing is fair and competitive, there is no reason not to publish petrol and diesel wholesale prices to prove the point and reassure motorists.The OFT launched a call for information on the UK road fuel sector in September last year to determine whether there were competition problems that need to be addressed before investigating concerns over the prices charged for petrol and diesel at the pumps.OFT chief executive Clive Maxwell said: "We recognise there has been widespread mistrust in how this market is operating. However, our analysis suggests competition is working well, and rises in pump prices over the past decade or so have largely been down to increases in tax and the cost of crude oil."

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Anger as OFT rules out fuel market probe

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