According to The OFT, The Petrol Market is “Working Well”
MANY OTHERS BEG TO DIFFER
According to The Office of Fair Trading, there is "very limited evidence" that retailers aren't passing on drops in the wholesale price to drivers quickly enough and will therefore not be holding a full enquiry into whether or not fuel prices in the UK are being manipulated; something that MPs and motoring groups have reacted furiously too – especially The Road Haulage Association.
But before we let them loose, let’s look at some of the salient points from the Office of Fair Trading – and please try not to laugh out loud when you read some of these.
The OFT said:
- There is “no evidence” that high petrol and diesel prices in the UK are causing bad behaviour in the industry with and diesel prices rising quickly when oil prices go up, but being slow to fall when prices drop.
- The petrol market is “working well”
- Pre-tax, “the UK has some of the cheapest road fuel prices in Europe. In the 10 years between 2003 and 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.”
There is possibly a fair point made in the last point there with the statement piling yet more pressure on to George Osborne as Chancellor, but “working well”? Were they looking at the same market as we do?
MPs have already said that they believe that motorists are being “ripped off at the petrol pump,” and the Road Haulage Association were a bit diplomatic in saying that they were “bitterly disappointed at the news that the Office of Fair Trading does not intend to pursue its investigations into fuel pricing.”
RHA Chief Executive Geoff Dunning actually said, in a long but particularly relevant statement that I have no compunction in reproducing here: “The RHA, together with FairFuelUK, has worked hard to raise this issue with Westminster in general and HM Treasury in particular. We considered the response from Chief Treasury Secretary Danny Alexander to be particularly encouraging. To hear that the OFT does not consider the disparity between barrel and pump price warrants further investigation will come as a real blow to every user of road fuel in the UK.
“The OFT also acknowledges that high pump prices are a result of high crude prices, not competition. On that basis, why, when the barrel price drops, is that drop is not reflected at the pump?
“What is the rationale behind fuel prices at motorway service areas being so much higher than those charged by high street retailers? These are all important questions which still need answering. As far as the Road Haulage Association is concerned, we asked for transparency but all we got was a whitewash.”
And, let’s be honest here; he is not wrong.
And British Car Auctions, also incredulous at the lack of action from the OFT, backed up this view by revealing figures that showed just how high fuel prices are affecting the running of the country – and that’s by the people who actually do the work and not the politicians and people who THINK they run the country.
The definitive BCA Used Car Market Report, based on a survey of 4,000 motorists, has revealed that the higher price of fuel will soon be forcing 53% of motorists to change their driving habits, ‘buy a more fuel efficient vehicle’ or both.
Tim Naylor, Editor of the BCA Used Car Market Report commented “Our research suggests many motorists are changing the way they drive to maximise their fuel efficiency. 70% of car owners have already taken steps to cut their motoring costs, trying different ways to combat the financial pressures. These include altering the way they drive (17% drive more slowly to conserve fuel), avoiding heavy breaking (16%) and opting for more fuel-efficient models.”
Because of high fuel costs, the report also found that: 29% of motorists are now walking more often; 21% of car owners are cutting the number of car journeys; and 9 out of 10 motorists intend to replace their car with a different type of vehicle next time with better fuel consumption top of the list.
Although some of this is good GREEN MOTORING news, it doesn’t hide the fact that fuel prices rise with a certain amount of alacrity when compared to fuel prices drops. Fair Trading? I don’t think so.