MSE News: Petrol market 'working well', despite high prices

kar999

I dont think anyone is questioning the amount of tax and duty on fuel is a reason for UK's high prices.

Differing prices due to geographical competition is also an issue but I thought the main complaint was what was described on the news as the "rocket and feather" effect which has nothing to do with tax and duty or local supply and demand. When wholesale prices rise the price at the pumps rockets within days. When it falls the prices take weeks to reduce.

Only hermits in caves are unaware of this phenemenon. Other common examples where it applies are for Gas and Electricity and years ago mortgage interest rates in the days when they moved frequently.

OFT says there is "little" evidence to show the rocket and feather effect but I'd like to to see their superimposed graphs of market prices v wholesale prices.

The AA said drivers would be disappointed the OFT had failed to address their frustration with prices on the forecourt.
AA president Edmund King said: "The OFT sees the fuel pricing market as competitive but this clashes with drivers' frustration on the forecourts. If fuel pricing is fair and competitive, there is no reason not to publish petrol and diesel wholesale prices to prove the point and reassure motorists.
"Since 2005, we have campaigned for the wholesale price to be made transparent so that drivers can see whether pump price movements are a fair reflection of costs. We continue to hold that view and will push hard for that to happen.
"The OFT are not ruling out action at local level and its call for motorway fuel price signs could bring more competition. But drivers deserve a better explanation of why prices fluctuate wildly and who is driving this - from the pump back to the well."

Gilbert2

kar999 wrote: »

OFT says there is no evidence to show the rocket and feather effect but I'd like to to see their superimposed graphs of market prices v wholesale prices.

Depends how they looked at the figures.

The supermarkets are always responsible for cutting prices but is this data mixed up with the like of Esso or BP and that then makes them look better?

As an aside, surely Morrisons cannot buy wholesale fuel cheaper than BP?

steve-L

Gilbert2 wrote: »

How do you know what the property/ownership arrangements of these companies is?

Some service stations have nothing other than fuel to sell and instore goods with nothing else on that site.


Almost all service stations are owned by 3 companies.
Moto, Roadchef and Welcome Break.

BP owns one in Scotland (almost nothing but fuel)
http://www.motorwayservices.info/operators

Yet they will still have high fuel prices despite probably owning the land.

Even if they did why not? If they did (like BP owns 1) then they have no competition on THEIR land.. so why sell cheaper.... ???

Like I say, they don't need an excuse ... I'd ask instead how they can charge £2 for a coffee that costs 10p to supply instead of £1.40 on fuel costs £1.20 to supply!

steve-L

Gilbert2 wrote: »

As an aside, surely Morrisons cannot buy wholesale fuel cheaper than BP?

Its a future, their traders can buy at the same bids as anyone else.
If they are as good at trading as BP is perhaps a different question....

jaydeeuk1

kar999 wrote: »

Martin Lewis, founder of MoneySavingExpert.com, which has campaigned for a more competitive current account market, said it was a "depressing read".
"It's just review after review after review," he said. "The OFT wimped out four years ago and to hear this now is just depressing."

Really feel for him. Even with £80m in the bank I bet he still has to get the bus.

madd

so not only are the fuel companies robbing us the govenment is as well

mo786uk

The reason so many of you are disappointed is because you don't understand what the role of the OFT is.

mo786uk

adamc260 wrote: »

A quick look on google shows that for Fuel totaling £100 (approx) the duty is £43.61 and vat £16.67 leaving the actual cost of the fuel at £39.73.

You hardly need to do an 'investigation' to work out the biggest percentage was to the government and therefore that is the issue for high fuel prices.

source: http://www.thisismoney.co.uk/money/cars/article-1633430/Petrol-diesel-tax-costs-calculator.html

exactly, so now we know its down to tax and not ANTI COMPETITIVE practices - which is what the OFT was looking at.

urbanmac

madd wrote: »

so not only are the fuel companies robbing us the govenment is as well

Please name a time in history when this did not happen!

steve-L

mo786uk wrote: »

exactly, so now we know its down to tax and not ANTI COMPETITIVE practices - which is what the OFT was looking at.

Exactly,
and as I have asked several times....
Why is it that people are complaining about a company putting 10p/l on fuel they buy at £1.20 vs £1.20 they put on a coffee costing 10p/l?

Add to that that although everyone to complain a reasonable proportion indicate they wouldn't travel an extra 10m to save 1p/l