Business group disappointed with OFT fuel pricing report

Business and motoring groups have voiced concern over an Office of Fair Trading (OFT) report that concluded fuel prices in the UK were fair.

The OFT's chief executive, Clive Maxwell, recognised there had been 'widespread mistrust' in the fuel market but said that the 'analysis suggests competition is working well.'

Its study concluded that a rise in pump petrol prices over the last decade had been caused by higher crude oil prices and increases in tax and duty, and not a lack of competition. It also found little evidence to suggest petrol and diesel prices rise quickly when oil prices go up, but fall slowly when prices drop.

However, the Forum of Private Business (FPB) described the OFT's decision not to launch a full investigation as a 'missed opportunity'. The AA said that drivers would be 'disappointed' that the report failed to address their frustration with prices at the forecourt.

The FPB's Alex Jackman said: "That we have some of the lowest pre-tax prices for petrol in Europe will come as little comfort to businesses who are paying a premium at the pumps. Whilst we praised the government for not implementing recent proposed increases, to go from the seventh lowest pre-tax price to the sixth highest post-tax price suggests there's something amiss in the UK."

The report also found that local areas with a greater number of local retailers, and in particular those that have supermarket forecourts, tended to have cheaper fuel prices.

Motorway service stations were found to be significantly more expensive for fuel and the OFT expressed concerns that consumers were not able to see the forecourt prices until they had left the motorway.

It has advised the Department for Transport to consider introducing new road signs to display service station fuel prices.

The OFT said that, while competition at a national level was strong, there were problems at a local level. Clive Maxwell said that where evidence of potential anti-competitive behaviour was received, the OFT would consider taking action.