The Office of Fair Trading is to look into how the industry has been setting prices on petrol and diesel


THE Office of Fair Trading (OFT) is to investigate UK petrol and diesel pump prices amid protests from business and consumers at the high price of fuel.


The OFT yesterday (Wednesday, September 5) issued what it termed ‘a call for information’ on the £32 billionUKpetrol and diesel sector.


The probe comes amid a rise in petrol prices rose of 38% between June 2007 and June 2012, and a 43% rise in diesel prices over the same period.


In light of continuing public concern about pump prices, the OFT says it wants to identify whether or not there are competition problems that it can tackle in the sector.

It is inviting the industry, motoring groups and consumer bodies to submit information.


The OFT says it will explore a number of claims about how the road fuels sector in theUKis functioning, including:

  • Whether reductions in the price of crude oil are being reflected in falling pump prices
  • Whether supermarkets’ and major oil companies’ practices may be making it more difficult for independent retailers to compete with them
  • Whether there is a lack of competition between fuel retailers in some remote communities in theUK, and
  • Whether concerns about price co-ordination and the structure of road fuels markets identified by other national competition authorities are relevant in theUK.


Claire Hart, director in the OFT’s services, infrastructure and public markets group, 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.’


The Petrol Retailers’ Association (PRA) has long called for an investigation and welcomed the OFT’s call for information.


Chairman Brian Madderson said: ‘The OFT’s decision to look into petrol and diesel prices is a significant step forward for the PRA’s campaign for a market study into anti-competitive pricing in the UK fuel market.


‘It has been 14 years since the last OFT investigation into the fuel sector and much has changed in the market since then.


‘RMIPetrol submitted a detailed report to the OFT earlier this year, asking for a ‘Market Study’ under the terms of the Enterprise Act 2002. The report provided evidence of alleged anti-competitive pricing across theUKbased on evidence gathered from their members.


‘We highlighted potential flaws in price referencing systems as one of the fuel price mechanisms needing proper investigation. Businesses, motorists and independent retailers all need much greater price transparency and we call on the Government to support the request for the OFT study.


‘The time has come to be proactive in the search for further evidence to test claims of anti-competitive pricing in theUK’s fuel market. It is imperative that independent fuel retailers respond to the call and submit evidence of unfair pricing and competition issues.’


MP Robert Halfon, who has been working with the PRA on the issue, has secured an MPs debate next week, to put even greater pressure on the OFT and the Government.


Halfon said: ‘There is strong evidence that the oil price is being rigged.Britainis being taken for a very expensive ride. We need an urgent investigation by the Government.’


The OFT will be gathering information over the next six weeks, and plans to publish its findings in January 2013….More at OFT launches probe into UK fuel pump prices » Automotive Industry