The Office of Fair Trading (OFT) is starting an investigation into rising fuel costs, giving drivers hope that we may one day enjoy cheaper fuel.
The OFT wants to know why petrol and diesel has increased in price by 38 per cent and 43 per cent, respectively, over the last five years to June 2012. As a result, the OFT is asking motor industry and consumer organisations to help gather evidence on why Brits are spending so much at the pumps.
According to What Car?, the OFT will be specifically reviewing four particular areas – chiefly whether lower crude oil prices are reflected in prices at the pump.
The watchdog will also look at whether the UK’s big supermarkets and oil companies are making it difficult for independent retailers to compete, and why those of us who live in rural communities, such as the Orkney Isles and the Isle of Man, where competition between petrol stations is at its lowest, end up paying more.
Also under investigation is whether price-fixing, the likes of which the watchdog has seen in Germany and Spain, is a factor in why fuel prices rarely correspond with the cost of oil per barrel.
The government has delayed an increase in fuel duty until January 2013, but there remains an undercurrent of discontent from drivers.
Overseas, our French cousins have reportedly vowed to reduce petrol prices for three months, and the Taxpayers’ Alliance is calling for the UK government to do the same by cutting fuel duty by 5p a litre over the next five years.
OFT director Claire Hart said in the report: “We are keenly aware of widespread concern about the pump price of petrol and diesel. We have therefore decided to take a broad-based look at this sector, to help us determine whether any further action is warranted.”
It’s not clear how effective the OFT investigation will prove as a large portion of fuel cost comes from government tax. If evidence of price manipulation is found, the OFT could refer the case to the Competition Commission, dish out fines and force guilty companies to change their behaviour.
According to the AA, the average cost of petrol is currently 135.5 pence per litre, and diesel averages at 140.4 pence per litre. The OFT’s report, which will last six weeks, will be published in January of next year, just in time for the next fuel hike. Are you feeling the pinch? We’d love to hear your thoughts.