Soaring cost of petrol prompts pricing review
Relentlessly rising petrol prices on forecourts across the country have finally forced the Office of Fair Trading to launch an investigation into Britain's fuel industry.
Average pump prices now stand at 138.99p a litre of petrol and 143.52 a litre of diesel. The increases are significantly higher than the rate of inflation and are not in line with underlying rises in oil prices and the wholesale cost of fuel.
The OFT yesterday launched a six-week investigation into competition worries. It will examine how oil companies set prices, and how filling stations, particularly those owned by the supermarkets, set their prices.
The investigation is launched against a background of accusations of predatory pricing by some supermarkets. The practice has led to a postcode lottery where motorists living in so-called "price jam" towns are forced to pay up to 5p more a litre for their petrol than neighbours a few miles away.
Claire Hart, an OFT director, said: "We are keenly aware of continuing widespread concern about the pump price of petrol and diesel and we have heard a number of different claims about how the market is operating. We want to identify whether or not there are competition problems in the sector."
The watchdog will investigate whether supermarkets' and oil companies' pricing practices are making it impossible for independent retailers to compete. It will also look into the perceived lack of competition between fuel sellers in remote areas.
Other areas the OFT will investigate include claims that falls in the price of crude oil are not being reflected in pump prices. "Every motorist knows it – when crude oil prices go up forecourt prices quickly follow suit. But when they come down again pump prices are slow to do the same," said Robert Downes, policy adviser at the Forum of Private Business.
Lack of competition in fuel pricing has become a global problem. A recent investigation by German authorities found a lack of retail price competition, and raised concerns about the market's structure and potential price co-ordination. It was a similar story in Spain, where the fuel industry has been investigated in three out of the past four years. In Australia, a formal investigation has been launched into price information sharing.
UK experts questioned why the OFT failed to act earlier. "An investigation of this market is overdue," said Edmund King, the AA president. "We've been calling for full transparency in fuel prices since 2005, allowing drivers to understand the relationship between oil, wholesale and pump prices."
David Bizley, RAC technical director, said: "Rising fuel prices cause economic hardship for millions, particularly in rural areas, so this really is news that motorists would like to have had a long time ago."
The OFT said it would gather information over the next six weeks and will publish its findings in January.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
Mark Dampier: An infrastructure fund that builds returns by taking different roads
Simon Read: Timeshare owners accuse Macdonald Resorts of land grab
Donald MacInnes: Let's pretend Scotland won and now a salmon is running the country
Five Questions: Changes to car tax discs
Bargain Hunter: Win a new iPhone 6
- 1 Scottish referendum: So how about the English now being given a chance to split from England?
- 2 Friends 20th anniversary: Alison Jackson photographs reunited cast
- 3 London council removes 'unacceptable' Stamford Hill posters telling women which side of the road to walk down
- 4 The response to my Pizza Express review has been overwhelming, and taught me a lot about journalism
- 5 Free U2 album: How the most generous giveaway in music history turned into a PR disaster
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Archbishop of Canterbury admits doubts about existence of God
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
Day In a Page
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize