Following its review of petrol and diesel pump prices in the UK, the Office of Fair Trading reckons there is no case to answer. Apparently the OFT believes that competition is working well in the £47bn UK road fuel market.
Today's report further stated that over the last 10 years, prices and increases in tax and duty have been caused largely by higher crude oil and not a lack of competition.
The OFT found that, pre-tax, the UK has some of the cheapest road fuel prices in Europe. In the 10 years between 2003 and 2012 pump prices increased from 76 pence per litre (ppl) to 136 ppl for petrol, and from 78 ppl to 142 ppl for diesel, caused largely by an increase of nearly 24 ppl in tax and duty and 33 ppl in the cost of crude oil.
The big four supermarkets have also been blamed, increasing their share of road fuel sold in the UK from 29 per cent in 2004 to 39 per cent in 2012. Many independent dealers have found it difficult to compete in this sector, with a significant number exiting the market.
Overall, the number of UK forecourts has fallen from 10,867 in 2004 to 8,677 in 2012, although the rate of decline appears to have slowed in the last three years.
The OFT also investigated the widely held perception that pump prices rise quickly when the wholesale price goes up, but fall more slowly when it drops, and found very limited evidence to support such claims.
Clive Maxwell, OFT Chief Executive, 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 the past decade or so have largely been down to increases in tax and the cost of crude oil.”
So that’s alright then. The matter of crude oil speculation on the stock market was not part of the remit and there were no reasons given as to why diesel is more expensive than petrol.
Quentin Willson of the FairFuelUK campaign, commented: “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 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. They did not address the whistleblower evidence of potential ‘rigging’ of the Oil commodity market. Where is the fairness in all of this?”
So that’s it then. It’s all perfectly fair and legit.We've got nothing to complain about. Apparently.
We’ll just have to continue paying through the nose, or in this case, paying through the hose!