OFT launches review into price of petrol
Wednesday 05 September 2012
The Office of Fair Trading today launched a review into whether reductions in the price of crude oil are being passed on to motorists.
The watchdog called for information from the industry, motoring groups and consumer bodies amid concerns over the prices charged for petrol and diesel at the pumps.
AA president Edmund King strongly welcomed the OFT's decision to investigate fuel pricing and said the move was "overdue".
The OFT said it will be gathering information over the next six weeks, and plans to publish its findings in January.
The UK retail road fuels sector is estimated to be worth around £32 billion, the OFT said. Petrol prices rose by 38% between June 2007 and June 2012, while diesel prices went up by 43% over the same period.
The OFT said it will explore a number of claims about how the road fuels sector is functioning, including whether supermarkets and major oil companies are making it more difficult for independent retailers to compete.
The review will also consider whether there is a lack of competition between fuel retailers in some remote communities.
Claire Hart, director in the OFT's services, infrastructure and public markets group, 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."
A Department for Transport spokesman said: "We welcome the OFT's decision.
"Many motorists are concerned about fuel prices and that when crude oil prices fall, this isn't seen at the pump as quickly as consumers would like.
"We look forward with interest to the findings of the study."
The OFT began to look at the issue in February when it received a submission from the Retail Motor Industry (RMI), which raised concerns about the ability of independent fuel retailers to continue to compete in the market.
Issues raised by the RMI, a trade body which represents car dealers, independent garages and petrol retailers, included low and below-cost pricing of road fuels by the big four supermarkets.
The RMI was also concerned that major oil companies involved in road fuel retailing through company-owned sites were selling fuel at prices close to the wholesale prices they charge to independents.
Fuel price campaigners FairFuelUK welcomed the move.
Quentin Willson, former Top Gear presenter and FairFuelUK campaigner, said: "There is a widespread feeling that when oil goes up, pump prices rocket immediately - but when the oil price falls, pump prices don't reflect that fall. This causes a sense of complete exasperation and anger."
RAC Foundation director Professor Stephen Glaister said: "We have always argued for pricing transparency and this review promises to provide it. There has long been a suspicion amongst drivers that pump prices are much quicker to rise than fall. Now at last we should get a definitive answer on how the market works.
"We also welcome scrutiny of what the rapid decline in the number of petrol stations has meant for fuel supply and price. In 1990 there were some 18,000 forecourts. Now there are fewer than 9,000."
- 1 Drugs Live cannabis trial: Hash is less harmful than any other drug, expert claims
- 2 What happens to your body when you give up sugar?
- 3 Turkish Airlines flight TK 726 crash-lands on Nepal runway in dense fog
- 4 Have sex with your iPad thanks to the new sex toy no-one asked for
- 5 The 'sex selfie stick' lets you FaceTime the inside of a vagina
Turkish Airlines flight TK 726 crash-lands on Nepal runway in dense fog
George Clooney and Amal fail to get special treatment at New York restaurant
Cindy Crawford 'un-PhotoShopped' viral Marie Claire image was doctored, photographer claims
'A girl is more responsible for rape than a boy': The statement that shocked the world... except India
The 'sex selfie stick' lets you FaceTime the inside of a vagina
Durham Free School: 'Creationism taught at' free school facing closure
Nearly 100,000 of Britain's poorest children go hungry after parents' benefits are cut
Ukip would cut billions from Scottish budget to fund English tax cuts
End of the licence fee: BBC to back radical overhaul of how it is funded
Ukraine crisis: Top Chinese diplomat backs Putin and says West should 'abandon zero-sum mentality'
Boris Nemtsov shot dead: Outspoken Putin critic who had expressed fears for his life is killed near the Kremlin
£30000 - £40000 per annum: Recruitment Genius: This is an exciting opportunity...
£35000 - £38000 per annum: Recruitment Genius: This leading provider of refrig...
£16000 - £18500 per annum: Recruitment Genius: Are you a customer focused, pro...
£27000 - £33000 per annum + Excellent benefits: Ashdown Group: Front-End Devel...