OFT reporting on fuel price probe
THE OFFICE of Fair Trading (OFT) is to report today on a review it has been carrying out into the petrol market.
Campaigners have called for the watchdog to announce a full investigation into the sector, saying there needs to be greater scrutiny.
The review, launched in September, has been looking at whether reductions in the price of crude oil are being passed on to motorists.
The OFT called then for information from the industry, motoring groups and consumer bodies amid concerns over the prices charged for petrol and diesel at the pumps.
The founder of campaign group FairFuelUK, Peter Carroll, said yesterday that the OFT should call for "a landmark full investigation into why the UK road fuel market is so dysfunctional with its regional variations, slow price falls, apparent market monopolies and pump prices that are measured in nine-tenths of a penny".
He added: "There is a suspicion that some people are making a lot of money speculating in the petrol and diesel market that is essential for every family and business in the country. This needs to be fully examined and these suspicions addressed.".
The OFT says the UK retail road fuels sector is estimated to be worth around £32 billion. Petrol prices rose by 38% between June 2007 and June 2012, while diesel prices went up by 43%.
The watchdog said on launching the review that it would explore a number of claims about how the sector is functioning, including whether supermarkets and major oil companies are making it more difficult for independent retailers to compete.
The review would also consider whether there is a lack of competition between fuel retailers in some remote communities.
The OFT began to look at the issue last February when it received a submission from the Retail Motor Industry (RMI), which raised concerns about the ability of independent fuel retailers 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.
The RAC said, as a supporter of the FairFuelUK campaign, it wanted the OFT to announce a full investigation.
Technical director David Bizley said: "We hope the OFT's findings will finally bring some much-need transparency to fuel pricing.
"While people understand petrol retailers' need to raise prices when industry wholesale costs go up, it is extremely frustrating to watch prices go up far faster than they ever come down.
"Rising fuel prices cause economic hardship for millions and hinder the growth of the economy, so it is vital that the process is both fair and clear."