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Fuel price rises 'due to taxes and oil price hikes, not retailers'

The Office of Fair Trading has completed its review into fuel prices. Photo: PA

If you are one of the millions of us who find it hard to believe how much it costs to fill the car these days, you won't get much relief from the Office of Fair Trading this morning.

Motorists' groups are likely to be extremely frustrated.

The OFT has just published a report into whether the fuel market is fair in the UK, and despite enormous price rises in the last few years, they find in the main that the market is "working well".

It concludes:

  • Price rises have been driven by tax rises and the hike in the oil price, not by bad behaviour in the industry.
  • There is a massive difference in the price of petrol in the countryside and cities, but that is down to a lack of choice in more remote parts of the country - where there are fewer retailers they have to do less to attract our business.
  • Motorway fuel is much too expensive and they suggest the Department of Transport looks at making service stations give drivers warning of their prices.
  • They find "very limited evidence" that fuel retailers aren't passing on drops in the wholesale price to drivers quickly enough.
  • Equally they find little evidence that market trading distorts price to the detriment of consumers.
  • Supermarkets moving into the fuel markets have made it harder for smaller petrol stations to make money, but the OFT says they have not behaved unfairly and the change has brought lower prices to drivers.
The OFT found that petrol retailers have not behaved unfairly. Credit: Press Association

The OFT does find that the industry's total margins have gone up quite handsomely - 14 percent in real terms for petrol, 41 percent for diesel.

But that is across refining, distribution and retail so we can't tell right now who is making the extra cash.

But these fast rising margins include increases in costs as well as profits and the OFT does not breakdown how much additional cash is going into the company coffers and how much extra they are having to spend.

Despite those rising margins the OFT does not find the industry has behaved unfairly, that is a crucial difference.

There is plenty more in the report, and we'll have more details later.

But in the main, if you hate high fuel prices, this report suggests the industry is not to blame.

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