The UK petrol and diesel sector is being put under the microscope by the fair trading watchdog amid rising prices at the pumps.The Office of Fair Trading (OFT) will spend six weeks gathering evidence about whether competition is being curtailed. The watchdog will also consider whether falling costs of crude oil are reflected in prices paid by motorists.It will publish its findings in January.
The OFT said that the UK retail road fuels sector was estimated to be worth about £32bn.Petrol prices rose by 38% between June 2007 and June this year, and diesel prices went up by 43% over the same period.In June, the government announced it would postpone its 3p-a-litre rise in fuel duty from August until January.
‘Widespread concern’ The OFT said the review, which is not a full-scale investigation by the watchdog at this stage, would study whether the action of supermarkets and oil companies made it difficult for independent retailers to compete in the market.The review would also look into whether there was a lack of competition at the pumps in rural areas.
Claire Hart, of 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.”
A significant chunk of the price paid by consumers on petrol is tax, which will not be covered by the review. The Department for Transport has previously suggested that industry should come up with a voluntary code of conduct to ensure wholesale price falls were passed on within a fortnight to the motorist.
International concern The latest figures from Experian Catalist show that the average cost of a litre of unleaded was 138.99 pence on Tuesday. The average price of a litre of diesel was 143.52 pence.Earlier this year, the Retail Motor Industry Federation raised concerns with the OFT about the ability of independent traders to compete in the market.Similar concerns about prices at the pumps have led to investigations from regulators in Germany, Spain and Australia.
