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Rural fuel fill-up scandal ignored as watchdog rules out petrol price probe

By Western Daily Press  |  Posted: January 31, 2013

Petrol prices are 2p per litre more expensive in the countryside

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The West Country’s rural motorists were snubbed yesterday after an official report found pump prices were 2p-a-litre more expensive in the countryside but concluded the market was “working well”.

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

The Office of Fair Trading said there was “very limited evidence” that pump prices rise quickly when the wholesale price goes up but fall more slowly when it drops. Furious campaigners, who had called on the OFT to announce a full investigation into the sector, said motorists would feel let down by the findings.

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 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?”

RAC technical director David Bizley said: “We’re extremely 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.

“UK consumers have seen a 38 per cent increase in the price of petrol and a 43 per cent increase in diesel costs between 2007 and 2012. The reasons behind this massive rise need to be conveyed clearly to the motoring public and justified so that households, businesses and the economy as a whole are not harmed by ever-increasing pump prices.

“It is a great shame the OFT has not taken this opportunity to instigate a full investigation into this issue which many motorists view as daylight robbery.”

AA president Edmund King said: “The OFT sees the fuel pricing market as competitive but this clashes with drivers’ frustration on the forecourts. 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’s report found that the UK had some of the cheapest pre-tax road fuel prices in Europe, noting that in the ten years to 2012 pump prices increased from 76 pence per litre 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. However, the investigation did identify a lack of pricing information on motorways as a concern and the watchdog said it would not rule out taking action in some local markets if there was “persuasive evidence of anti-competitive behaviour”.

OFT chief executive Clive Maxwell said: “We recognise 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 have largely been down to increases in tax and the cost of crude oil.”

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  • siarad2  |  January 31 2013, 12:40PM

    There's a simple reason prices rise immediately & that's so the company has enough money to refill it's tanks at the new price otherwise they'd need a cash injection. Oddly no compensatory refund comes to the motorist when prices fall, profits profit init. This was a problem during the 1970s when Wilsonian 'price control' was in force: shops shelves became more empty & motorists suffered breakdowns due to garage tanks being more & more empty, thus causing condensation which stopped car's engines a short way after filling up, happened to me & many others.