Saturday, February 2, 2013

Road Haulage and Freight Representatives say Fuel Report a Whitewash and a Side Show

Anger as OFT Report Sidesteps the Subject of Duty and Taxes
Shipping News Feature

UK – The report from the Office of Fair Trading (OFT) to investigate competition in the pump price of fuel which came out this week has received a decidedly unfavourable reception from many including FairFuel UK, the Freight Transport Association (FTA), the Road Haulage Association (RHA) and some MP’s. In what sometimes reads as a self contradictory piece the OFT concludes ‘at national level competition is working well in the UK road fuel sector’ whilst going on to say that motorway service stations (a key filling point for truck operators) tend to disguise their prices before one enters their sites whilst charging significantly more than the national average, and that in areas where there is little competition for sales, and urban regions, prices again are higher.

The report also says that, whilst despite it having a lack of evidence of any anti-competitive practices being used against independent dealers it is prepared to act should such evidence be forthcoming and talks of the influence of supermarkets on local fuel outfits and how their market share of fuel sales has risen by 10% in eight years whilst saying, almost as an aside, that UK fuel duty charged has jumped by £0.24p per litre since 2003 helping to push pump prices to inordinately high levels.

The campaign led by FairFuel UK continues to press the Government and was quick to support the Early Day Motion tabled by Robert Halfon MP in an attempt to hold a full scale enquiry into what they refer to as the ‘scandal of fuel prices’. The Parliamentary motion notes that the OFT has ignored evidence of market abuse and that over the last ten years the margins for refining, wholesaling and retailing of petrol and diesel have increased by 14 % and 41% respectively, the latter of course of particular importance to hauliers. Speaking in his blog Quentin Willson, FairFuelUK campaigner, says:

“Robert Halfon is absolutely right to question the Government on the OFT's decision which shocked the nation. We have whistle-blower evidence that speculators and commodity houses are pushing up the price of oil and it is common knowledge that the UK road fuel market is anything but transparent. Consumers are confused and angry and want to know why oil and fuel prices keep rising when demand is falling.”

The FTA dismissed the report as ‘a side show’ and explained that despite selected parts from its own evidence to the OFT being quoted in the release, such as stating that the rises in pump prices for petrol and diesel over the past 10 years have been caused largely by higher crude oil prices in tax and duty and not a lack of competition, it simply glosses over the issue with James Hookham, FTA Managing Director Policy & Communications, saying:

“This report from the OFT won’t change anything, and FTA believes it is only a distraction from the real issue of fuel duty and the Chancellor still has to do something. In our view, the quickest and most effective way to get expensive petrol down is not to buy it. Quite simply, if there are scurrilous petrol retailers who set their own pump prices, then don’t go to them – take a leaf out of the commercial operators’ handbook and don’t get ripped.”

The Road Haulage Association (RHA) was even blunter in its response to the report with CEO Geoff Dunning saying:

“To hear that the OFT does not consider the disparity between barrel and pump price warrants further investigation will come as a real blow to every user of road fuel in the UK. The OFT also acknowledges that high pump prices are a result of high crude prices, not competition. On that basis, why, when the barrel price drops, is that drop is not reflected at the pump? What is the rationale behind fuel prices at motorway service areas being so much higher than those charged by high street retailers? These are all important questions which still need answering. As far as the Road Haulage Association is concerned, we asked for transparency but all we got was a whitewash”.

To read the OFT report in full click HERE.