Petrol and diesel prices: Office of Fair Trading launches competition inquiry

Industry, motoring groups and consumers to submit evidence over claims that lower crude costs are not reflected at the pumps

The Office of Fair Trading has opened an inquiry into claims of unfair competition at the pumps amid widespread concerns about soaring petrol and diesel prices.

The British examination of a market said to be worth £32bn a year follows similar investigations in Germany and Spain, which both found evidence of a lack of competition in the road fuel sector.

The OFT has asked industry, motoring groups and consumer bodies to submit information over the next six weeks and said it planned to publish its findings in January 2013. Claire Hart, a director at the OFT, 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 have therefore decided to take a broad-based look at this sector, to provide an opportunity for people to share their concerns and evidence with us. This will help us determine whether claims about competition problems are well-founded and whether any further action is warranted," she said.

The OFT's investigation was welcomed by a variety of groups that have expressed alarm after the petrol price rose 38% since June 2007. Diesel has gone up by 43%.

Stephen Glaister, director of the RAC Foundation motorists' group, said: "We have always argued for pricing transparency and this review promises to provide it. 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."

The campaign group FairFuelUK, was also pleased. Quentin Willson, a 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."

Major oil companies and supermarkets are allegedly making it hard for independent road fuel providers to compete and are slow to pass on lower crude costs.

In a separate development, a House of Commons energy committee revealed a survey showing that half of householders blamed profiteering by the Big Six energy suppliers for high domestic fuel costs.

The survey of householders showed that 50% blame energy company profits and only 23% attribute it to fossil fuel price rises. Just one in 20 of those questioned blamed high prices on the subsidy for renewable companies.

Tim Yeo, chairman of the energy and climate change committee, said a range of changes were needed to ensure that householders did not feel ripped off.

"If consumer trust in energy companies is to increase, there needs to be more competition in the market and more transparency about profits," he said.


Terry Macalister

The GuardianTramp

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