The Office of Fair Trading has given the UK petrol market a clean bill of health, despite concerns from independent operators.
The watchdog’s report into the sector, following the launch of an investigation in September last year, concluded that rises in pump prices over the last 10 years were due to higher crude oil prices, tax and duty and not a lack of competition.
The supermarkets had increased their share of fuel sold in the UK from 29% in 2004 to 39% in 2012 and their high throughput and greater buying power had allowed them to sell fuel more cheaply than other competitors, it said.
Although the OFT said it “recognised” independents had found it difficult to compete in the sector, the rate of those exiting the market had slowed in the last three years. “In the majority of areas where forecourts closed between November 2011 and August 2012 retail competition still appears to be strong,” it added.
However, the OFT did identify concerns over the absence of pricing information on motorways.
“We recognise that there has been widespread mistrust in how this market is operating. However, our analysis suggests that competition is working well, and rises in pump prices over the past decade or so have largely been down to increases in tax and the cost of crude oil,” said OFT CEO Clive Maxwell.
“Our call for information has not identified any evidence of anti-competitive behaviour in the fuel market at a national level, where competition appears to be strong.”
Indie associations were quick to criticise the OFT’s findings.
“The growth of supermarket filling stations has coincided with the decline of independents. It may be true that they increase competition, but by offering healthy discounts only when large amounts are spent in store, those discounts are not without their own cost,” said Forum of Private Business head of policy Alex Jackman.
“We don’t understand how the OFT can come to the conclusion they have bearing this in mind. This is a classic example of big supermarkets using their size and buying power to assimilate local markets for their own gain. They simply have too much power, and we think this was a missed opportunity by the OFT to take this further.”
Petrol Retailers Association chairman Brian Madderson said that every new supermarket forecourt “destroyed” up to five independent forecourt businesses.
He added: “How can the OFT, supported by government, try and tell motorists and businesses that the market is working in the consumer’s interests? As independent retailers, we are left trying to explain the unexplainable to our forecourt customers who will rightly be angry at another unwarranted price hike.
“The establishment has once again turned a blind eye to the need for a full market study which would have unmasked the market manipulators, provided proper transparency and helped our economic recovery.”
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