Motorists 'fleeced' at the pumps

Published by Edmund Greaves on 19 June 2018.
Last updated on 19 June 2018

Motorists 'fleeced' at the pumps

Motorists blighted by recent fuel prices rises will be angered that retailers are raising prices over and above oil price changes.

According to campaign group FairerFuelUK, the rising cost of filling up at the pump has outstripped the wholesale cost changes to retailers. The group is accusing retailers of using negative news stories such as the breakdown of the Iran nuclear deal to push up their pump prices in what it calls a “greedy pricing strategy”.

FairerFuelUK goes as far as to say that inflation would currently be lower if it weren’t for these rises. Despite the fact that commodity prices for oil have fallen in recent weeks, retailers have not passed on the savings to motorists. According to the group, prices should, in fact, be 5p lower than they actually are.

Howard Cox, FairFuelUK campaign founder, explains: “In Germany and France, pump prices can fluctuate daily, even hourly. The cost of filling up in these countries accurately reflects oil and wholesale prices.”

Between 28 March and 15 June 2018, wholesale prices rose on average by 5.4p for diesel and 4.5p for petrol. Retailers, however, pushed up prices on average by 9.5p for diesel (a 75% hike above wholesale price increases) and 9.4p for petrol (a 108% hike). The group estimates this would have resulted in £500 million in extra profits for retailers.

Mr Cox adds: “Here in the UK, motorists and businesses are exploited ruthlessly by greedy speculators and the fuel supply chain. The government must protect consumers and the economy from this recurring disingenuous manipulation.”

FairFuelUK is now calling for the creation of a 'PumpWatch’” service to monitor fuel prices to ensure motorists aren’t being left out of pocket. This call is being echoed by MPs angry at the findings.

Kirstene Hair MP agrees that a fuel price monitoring body is needed: “It is unfair that retailers are increasing costs disproportionately for hard-working families, small businesses and the haulage industry.

“The rising costs for businesses will make it more challenging to operate, while household budgets will be squeezed as they pay more in fuel to get to and from work. Families and small businesses need more transparency over what they pay at the pump. We need an independent price monitoring body, this will ensure households and businesses are no longer charged unfairly for fuel.”

Robert Halfon MP adds: "Yet again, motorists face the great fuel price rip-off - greedy oil companies ratcheting up pump prices when the cost of oil goes up, but acting slower than a snail when oil prices go down. It is time oil companies stopped taking motorists for a ride."

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Using petrolprices.com I have

Using petrolprices.com I have been saving on average 5p per litre on both petrol and diesel. This site provides up-to-date pricing for local petrol stations, including supermarkets. You can also registser for weekly alerts.
Recently I purchased petrol for 119.9p/litre when other outlets were charging 126.9p - 128.9p (and I saw 134.9p at motorway services).
On a full tank of fuel, that's a saving of around £4.50, and refueling twice per month = £112.50 per year (= two free tanks of fuel)

welcome to RIP OFF BRITAIN, i

welcome to RIP OFF BRITAIN, i have never come across a company in this country who does not rip off the punters.
they will keep on doing so.

At the same time the major

At the same time the major retailers are lobbying for tax credit because of ‘vapour lost’ ( the fraction of fuel lost from fuel station tanks due to warm weather ) they manipulate oil price movements to inflate their forecourt prices DESPITE forwarding hedging their fuel ( like BA & Ryan Air ) to max their profits. They claim sterling against the dollar inflates pump prices ‘ except ‘ when sterling moves against the £.

This is nothing new - fuel

This is nothing new - fuel retailers always hurry to increase prices at the slightest opportunity, but then drag their feet about any price reductions when underlying factors go in the opposite direction. Years ago, I monitored UK pump prices against ARA wholesale prices and not only proved that this happens, but also that retailers routinely profiteer on diesel, knowing that diesel is most in demand. When i took this up with the Petrol Retailers Association (with detailed data), they just came back with the standard blather about pump prices always lagging because retailers buy their fuel ahead of time - that's a fine excuse when price reductions are expected due to wholesale prices falling, but they never seem to apply it when the wholesale price rises. They also never replied at all about maintaining artificially-high diesel prices.. Then I notified the Office of Fair Trading (with detailed data) and they just said it wasn't their job to police retail prices and they couldn't comment upon my data (which was taken daily directly from ARA wholesale prices and indexed against the very cheapest petrol retailers in my area, for maximum fairness in the retailers' favour). It's all a big con.

Instead of the public being

Instead of the public being exploited by the petrol retailers who are quite blatant in their thieving practices against the public, why do goverments simply watch all this theft from the sideline. Why doesn't the Government create legislation that prevents profiteering by the retailers? For example, making it illegal to charge a price for petrol that exceeds a fixed fraction of the price paid for the bulk petrol and fine the retailers a punitive sum when that legislation is not complied with.

This is a kettle of worms

This is a kettle of worms best left closed. Firstly, fuel retailers pay greatly varying prices for their stock, mostly depending upon how much volume they shift (ie are they a high-value customer for the oil company) - it's an entrenched problem for smaller retailers, who see themselves easily outcompeted. There is also the matter of high operating costs in some retail locations (eg motorway services). Secondly, local competition has some effect - a supermarket filling station will tend to force others in their locality to lower their prices - but as in my area where there are several supermarkets competing, they always tend to find a 'happy' level at which they all do good business. which can then sometimes look like price fixing (ie they match one another). Thirdly, it's all about supply and demand - suppliers supply to meet demand at a price that buyers are willing to pay to satisfy their demand. Fourthly, there is the murky grey area of advance purchasing, where retailers hedge against wholesale price fluctuations and in doing so they can benefit half of the time and lose out half of the time compared to buying ad hoc. When I challenged the Petrol Retailers Association about pricing a decade ago, this was their defence. Fifthly, how often do you ever hear of any businesses in any sector being transparent about how much they pay for stock? It doesn't happen - and forcing wholesalers to publish their prices to all their customers would be breaching commercial confidentiality. That way lies totalitarian price-fixing, corruption between traders and 'regulators' and destruction of a healthy marketplace. Think Cuba or Soviet-era Russia. Not to mention that one wholesaler will have many different price levels according to the amounts being bought by each customer - and that's in any sector, not just fuel. These are matters that will never be resolved, but one that ought to be sorted out is the way that retailers deliberately subsidise petrol via charging a higher margin on diesel. When fuel prices were extremely high around ten years ago, as wholesale prices fell I watched my local ASDA (the cheapest retailer in the area) effectively almost zeroing its margin (down from 8p/litre to around 2p/litre) on petrol while increasing its margin on diesel (from around 11p/litre to 15p/litre). When wholesale prices bottomed out, diesel was cheaper than petrol on wholesale for months, but I only saw the diesel on sale cheaper than petrol for one single day, before equalising and then creeping ahead again. Diesel is the rip-off for British consumers.

Well researched! But we

Well researched! But we shouldn’t tolerate profiteering by making the system bureaucratically complex. That approach allows abusive practices!