Britons would enjoy some of the cheapest fuel prices in Europe if ministers of both the Coalition and Labour governments had not imposed such huge tax incrases over the last decade, the competition watchdog has said.
MPs and motoring groups reacted angrily after the Office of Fair Trading (OFT) decided not to hold a full inquiry into whether fuel prices in the UK are being manipulated. The OFT said there is “no evidence” that high petrol and diesel prices in the UK are caused by profiteering in the industry.
It said that the petrol market is “working well” – despite consumers paying near-record prices at the pumps and that pre-tax, “the UK has some of the cheapest road fuel prices in Europe”.
“In the 10 years between 2003 and 2012 pump prices increased from 76 pence per litre (ppl) to 136ppl for petrol, and from 78ppl to 142ppl for diesel, caused largely by an increase of nearly 24ppl in tax and duty and 33ppl in the cost of crude oil,” the report stated.
The investigation into the £32billion industry was launched in September last year. It comes after ministers yesterday told news media they believe motorists are being “ripped off at the petrol pump”. Petrol prices rose by 38 per cent between June 2007 and June 2012, while diesel prices went up by 43 per cent.
Robert Halfon, the Conservative MP for Harlow, said it was “disappointing” that the watchdog has decided not to hold a full inquiry.
The RAC urged the OFT to “reconsider the decision” and said motorists view UK fuel prices as a form of “day-light robbery”.
Mr Halfon said that families across the country are “crushing families across the country.”
“It is disappointing that they will not hold a full inquiry,” Mr Halfon said. “For example, they admit that there is a problem with poor competition in many towns, such as Harlow - which keeps prices high at the pump - but they are not taking action."
The OFT review investigated whether petrol and diesel prices reacted appropriately when crude oil prices dropped.
It also questioned whether supermarkets or big oil companies were behaving in ways that made it more difficult for independent retailers to compete with them.
The report concluded that price rises have been driven by tax rises and rising oil prices.