No Market Manipulation on Fuel Prices Says OFT
For a long time many drivers and motoring organisations have had concerns over how the market works on fuel prices. One of the main issues is the feeling that fuel prices are quick to rise when the price of crude oil goes up but slow to drop when the price of oil falls, the so-called 'rocket and feather' pricing.
For a long time many drivers and motoring organisations have had concerns over how the market works on fuel prices. One of the main issues is the feeling that fuel prices are quick to rise when the price of crude oil goes up but slow to drop when the price of oil falls, the so-called 'rocket and feather' pricing. This prompted the Office of Fair Trading (OFT) to launch an investigation into the fuel market in September last year. Now they have published their findings and motoring organisations and drivers' groups are far from pleased.
Publishing their findings on the petrol and diesel market on January 30th, the OFT has said they have found little evidence of any market manipulation. The report states that, "The evidence gathered by the OFT suggests that at a national level, competition is working well in the UK road fuel sector." The OFT's Anne Pope went on to confirm the key findings of the report, concluding that, "Most of the increases are due to crude oil prices and tax and duty."
Motoring organisations are unimpressed with the OFT's findings. The RAC foundation has said that it offers 'little comfort' to hard-pressed motorists. Petrol Retailers Association chief, Brian Madderson, was even more disparaging in his response, commenting, "This was a prime opportunity, supported by considerable new information from our retailers, to tackle market manipulation of UK wholesale prices and retail prices by the big players."
Madderson went on to point out that an increase of over 7p per litre over the Christmas period came at a time when "refineries have over-supply and demand has slumped due to the Arctic weather". OFT chief executive Clive Maxwell acknowledged the 'mistrust' of drivers in how the market was operating but defended his organisation's report, claiming, "our analysis suggests that competition is working well and rises in pump prices over the last decade or so have largely been down to increases in tax and the cost of crude oil."
The OFT report did uncover one area of concern surrounding the price of fuel at motorway service stations which it found to be significantly more expensive than at standard filling stations. They raised concerns that drivers could not see the price of fuel before they left the motorway to enter the service station and called on the Department for Transport to introduce motorway signs to display fuel prices. The report also found that pre-tax prices for fuel in the UK were some of the cheapest in Europe, prompting calls for fuel receipts to show a breakdown of how much the government is taking in tax.
Back to January 2013