Fleet News

RHA applauds OFT action

The Road Haulage Association (RHA) has welcomed the news that the Office of Fair Trading (OFT) has called for information on the UK petrol and diesel sector.

"Diesel accounts for over a third of a haulier’s operating costs," said RHA chief executive Geoff Dunning. "Between June 2007 and June 2012, diesel prices have risen by 43%; a rise which will no doubt have a had a very significant depressing effect on the economy."

The UK retail road fuels sector is estimated to be worth around £32 billion and in light of continuing public concern about pump prices, the OFT 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 will explore a number of claims about how the road fuels sector in the UK is 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 the UK, and
• whether concerns about price co-ordination and the structure of road fuels markets identified by other national competition authorities are relevant in the UK.

"Fuel pricing has always been a massive issue for the Association and its members," continued Dunning.

"We are greatly encouraged that the OFT has recognised the concerns of the haulage industry and the general public and is preparing to take action."
 

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Comments

  • rosco7 - 06/09/2012 15:02

    I'm afraid they are wasting their time and the RHA are being naive. The OFT will do the report and the finding will have a few anomalies that are identified and it will be business as usual for the fuel companies.

    The UK government has little to gain from a genuinely competitive fuel market. Higher prices mean a higher VAT bill. Bigger fuel company profits mean a bigger corporation tax bill.

    In reality, there are on average 2 fuel stations closing every day in the UK. The franchised fuel station, only makes money on additional sales, the fuel price is either a loss leader or the margin is insufficient to cover the standing costs. It is clear that a cartel exists in the road fuel market, otherwise the price would vary more. I agree that in remote areas the prices are higher, but this is probably them charging what they can get away with. If its 50miles to the next station then they know drivers don't have a choice and the price reflects this. I doubt this is price fixing, that would only occur if two or more garages in close proximity all had high prices.

    The OFT is another QUANGO, like OFGEN and OFWAT. You only have to look at what OFGEN has done to the price of utility bills. The OFT have a very poor level of performance when it comes to dealing with the major corporates.

    Still I hope this time they do a good job and enforce it, but I'll wager in a years time we will still be in the same position.

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  • Jakes de Kock - The Fuelcard Company - 07/09/2012 09:22

    Along with the nation’s business fleets, we welcome the news regarding the Office of Fair Trading (OFT) report into fuel prices.

    It’s interesting to note, however, that this review will not cover any aspect of fuel tax which in real terms makes up over 60 percent of the final price of fuel, compared to which the retailer margin is minimal. Through fuel cards, our customers have access to wholesale fuel prices and yet fuel still accounts for up to 30 percent of a fleet’s total operating cost. With pump prices continuing to rise, the transport sector will surely crumble if support is not provided.

    Campaigners, such as FairFuelUK, have worked tirelessly to lobby to reduce fuel duty and, while all support in reducing the overall price of fuel is welcome, perhaps this review is really distracting us from the bigger issue of how the Government should be helping the transport sector through reduced taxation.

    The results of the OFT report are due in January, conveniently after Mr Osborne has introduced his 3p per litre fuel tax rise. In my opinion, the OFT review is too little, too late and not focusing on ‘the bigger picture’.

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