February 01, 2013 - Rachel Miller
The FPB has described the OFT's decision not to launch a full investigation into the state of fuel pricing as a "missed opportunity".
The OFT report has concluded that rises in pump prices for petrol and diesel over the past ten years have been caused mainly by higher crude oil prices and increases in tax and duty and not a lack of competition. It found that, pre-tax, the UK has some of the cheapest road fuel prices in Europe.
Clive Maxwell, OFT chief executive, said: "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."
However, the FPB says the report will be "cold comfort" to firms that rely on fuel to do business.
Alex Jackman, FPB head of policy, said: "That we have some of the lowest pre-tax prices for petrol in Europe will come as little comfort to businesses who are paying a premium at the pumps. The problem of the overall price of petrol would seem to lie squarely in the tax take, and this Government, along with previous ones, continues to ignore this most pressing of issues for business. Our own research has previously shown this to be one of the biggest costs for our members."
Corin Taylor, senior economic adviser at the Institute of Directors (IoD), said: "The UK has some of the lowest pre-tax fuel prices in Europe, but some of the highest after tax, making it painfully expensive for companies to move goods around our road network, and for their staff to get to work.
"The Government can do little to control crude oil prices, but with VAT and fuel duty making up 60% of prices at the pump, it does have the power to reduce the cost of fuel for hauliers, businesses and all drivers across the country."