Fuel prices are "fair and doing well"

So the latest trollop to come from our country is the OFT (Office of Fair Trading) making the statement, "the fuel market is working well" - they will not investigate fuel prices any further, despite them once again going on the rise.

Petrol prices are "fair" according to the OFT. Photo: www.tntmagazine.com

The OFT have stated that the retail price of fuel is one of the cheapest in Europe, once you minus the VAT and tax on there. What a pointless statement to make - it is something we already know. The main issue I, and many others, have is that prices always sky rocket when the wholesale price of crude oil goes up, but it fails to reduce in cost when crude oil prices drop. Now, even with tax in the loop this shouldn't be happening. If anything, the tax is less when the crude oil prices are lower so why aren't these savings being passed down to the consumer.

Another issue I have is the many different variations in price, depending on where you are. Competition is fine, it helps the consumer by providing the cheapest possible price but I'm not talking about these variations. Take me for example, I live in Stockport where the average price of fuel is around 132.7p per litre(source: www.petrolprices.com). Sam, on the other hand, lives in Oldham where the average is 132.2p per litre. Now I know this isn't a massive difference but the further up into the Saddleworth moors you go, the higher the price becomes. I think I remember driving past a service station up there that was selling unleaded at 153.4p per litre! 

To me, this does actually warrant some form of investigation. I can understand the small, family run service stations charging a bit more but surely there should be some consistency to major brand pricing. Why does a Shell near me charge 132.9p, yet a Shell 10 miles away charges 139.9p? I just don't see how this is fair.

Below I have included a diagram from www.petrolprices.co.uk, showing the breakdown of a lire of unleaded at 132.9p and a litre of diesel retailing at 137.9p:

 

















It is quite clear that the government is taking the largest chunk of the price we pay (don't forget they take the duty AND the VAT). This leaves 5p of every litre for the retailer. Whilst compared to the government share it looks pretty dire, it still doesn't excuse why the retailer puts the prices up in certain areas - maybe to increase the profits to compensate the lower priced areas?

At the end of the day, it's the consumer that is the victim in all of this. Maybe it's time the government rethought their strategy on fuel duty - it isn't helping put them on motorists' Christmas card lists...