Escalating fuel costs due to tax

Escalating fuel costs due to tax

Motorists and driving organisations throughout the UK are dumbfounded after a study into rising fuel prices, launched in September 2012, concludes that we are paying fair prices for our fuel.

The research was undertaken by the Office of Fair Trading (OFT) to see whether anti-competitive behaviour, and other business practices were 'fixing' the price of fuel. Their findings were that "...competition is working well in the UK road fuel sector..." and that "...rises in pump prices over last decade or so have largely been down to increases in tax and the cost of crude oil."

Campaigners such as the pressure group Fair Fuel UK and the Petrol Retailers' Association are shocked by the results. Spokesman for Fair Fuel UK, Quentin Willson, commented: "The OFT appears to have failed to address the key issues of : why diesel is more expensive than unleaded in the UK when this is not the case in Europe, why falls in the oil price take so long to be reflected at the pump, and why there are such variations in price, often from the same branded forecourts, within the same area."

On the other hand, the director general of the Petroleum Industry Association in the UK, Chris Hunt, commented: "The UK has had amongst the lowest pre-tax pump prices in the EU for over a decade so the findings come as no surprise."

Indeed, the findings of the OFT were that the UK were fortunate enough to have some of the most inexpensive road fuel costs in the EU before tax was applied. In the last 10 years the price of fuel has almost doubled, with the average price for a litre of petrol being 76 pence in 2002, whereas in 2012 it was 136 pence on average. The OFT's findings were that this rise can mainly be blamed on increases in tax and duty in crude oil prices over the decade.

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