Motoring groups slam petrol prices report
MOTORISTS are not being ripped off at the pumps despite steady rises in the price of fuel, according to the Office of Fair Trading.
Competition is "working well" in the UK road fuel market and rises in pump prices over the past decade are largely due to increases in tax and the cost of crude oil, the OFT reported.
The OFT found "very limited evidence" that pump prices rise quickly when the wholesale price goes up but fall more slowly when it drops.
But road groups have slammed the findings, saying that motorists will be "bitterly disappointed" the OFT has not launched a full-scale investigation of fuel pricing in the UK.
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The OFT said its investigation into the market did identify a lack of pricing information on motorways as a concern and it did not rule out taking action in some local markets if there was "persuasive evidence of anti-competitive behaviour".
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.
Campaigners had called for the watchdog to announce a full investigation into the sector, saying there needs to be greater scrutiny.
But the OFT said 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 (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.
It said a key feature of the sector over the past decade had been the growing influence of the big four supermarkets, which had increased their share of road fuel sold in the UK from 29 per cent in 2004 to 39 per cent in 2012.
It recognised that many independent dealers had found it difficult to compete in the sector, with the overall number of UK forecourts falling from 10,867 in 2004 to 8,677 in 2012.
The OFT said it was concerned that drivers were not able to view prices until they had pulled into motorway service stations and had asked the Department for Transport to consider introducing new road signs that would display prices for motorway drivers.
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 the past decade or so have largely been down to increases in tax and the cost of crude oil."
But campaigners hit out at the OFT's findings. 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.
"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. 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.
"Our members want to see fairness and transparency and the authorities and industry bodies have an obligation to deliver this. We strongly urge the OFT to reconsider the decision."
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.
"Since 2005, we have campaigned for the wholesale price to be made transparent so that drivers can see whether pump price movements are a fair reflection of costs. We continue to hold that view and will push hard for that to happen.
"The OFT are not ruling out action at local level and its call for motorway fuel price signs could bring more competition. But drivers deserve a better explanation of why prices fluctuate wildly and who is driving this – from the pump back to the well."
FairFuelUK spokesman Quentin Willson said: "UK consumers will be bitterly disappointed. The nation will feel let down. The Americans and the Germans are holding inquiries – why aren't we?"
And a survey of 4,000 motorists by British Car Auctions (BCA) also suggested motorists were voting with their feet in reaction to rising fuel prices.
The BCA said 53 per cent of motorists surveyed said the higher price of fuel will eventually push them into buying a more fuel efficient vehicle or change their driving habits or both.
Some 1 in 10 drivers said they would change to a more fuel-efficient car if the price of fuel hit £1.50 per litre.
A Downing Street spokeswoman said: "It is for the OFT to look at this issue and they have done. They have made it very clear that if there is any further evidence they will look into it and take action.
"But on this latest issue, DECC (the Department of Energy and Climate Change) are looking at the OFT's response."