All Drivers Not Only Road Haulage Freight Operators Can Petition for Diesel and Petrol Price Control

Thursday, January 3, 2019

UK – Although the pump price of fuel does not trouble British voters, or indeed politicians, to the extent to be found in the US, there is a definite edge to the latest pronouncements from FairFuel UK, the outfit started by former road haulage operator Howard Cox which dedicates itself to pointing out anomalies in the price paid by both the freight industry and ordinary citizens when it comes to filling their respective tanks.

Often the critical eye of the organisation is focused on the government and its policy regarding duty but the latest broadside has come principally against what it sees as excessive profiteering by those engaged in the fuel supply chain. Now the All-Party Parliamentary Group (APPG) of which Mr Cox is the secretary, is calling for the government to install an Independent Pump Price Monitoring Body which it is notionally calling ‘PumpWatch’.

The APPG contains MP’s Kirstene Hair as Chair with Vice Chair Robert Halfon and the claim is that, since the beginning of October, pump prices have been on average 4 to 6p higher than necessary, generating a £600 million windfall for suppliers post refining, with the Treasury collecting a bonus of £100 million in extra VAT. MP for Angus Kirstene Hair, said:

“Drivers need reassurance that they are not paying way over the odds for fuel. In rural communities where, public transport is poor and unreliable, people need their vehicles to get from A to B. It is essential that they pay the fairest price. That is where a price monitoring system would support them.”

In a statement Howard Cox pointed out that during recent price fluctuations, as oil prises rise and fall, millions of drivers have had absolutely no idea what subsequently they will pay at the pumps each time they fill up their vehicles. Even when the crude price is stable prices vary with an opacity in how the final figure is arrived at.

Cox went on the praise the supermarket chain ASDA calling the firm the ‘consumer’s champion’ and saying if it was not for the company’s forecourt price cut the situation would be even worse. He went on:

“If gas, electricity, water and telecoms get price protection bodies, why shouldn’t motorists have one too? We need ‘PumpWatch’ now, to ensure pricing fairness for both consumers and hardworking fuel retailers too. Most of the profiteering is at wholesale level not by small independent retailers, who also fall victims of the greedy fuel supply chain.”

Quentin Willson, TV Motoring Journalist and partner in FairFuelUK agreed with these sentiments saying the prices were being kept artificially high by avaricious fuel suppliers and Harlow MP Robert Halfon said that a scheme such as PumpWatch was the only way fairness in pricing could be ensured.

Figures from FairFuel UK indicate that by subtracting the wholesale price of fuel from the average retail price published the first 9 months of 2018 showed petrol retail profits averaged 8p per litre and diesel 8.6p per litre. However in the last quarter of 2018 petrol profits had risen to 13.27p per litre and diesel 11p per litre.

During the 11 weeks between 3 October and 21 December the wholesale price of diesel fell by 13% (16.5p), yet pump prices dropped only 3% (4p) whilst wholesale petrol prices in the period fell 14% (17p), pump prices dropped only 7% (9.5p). From the beginning of October to end of 21 December the oil price fell 36% in Sterling from £66 to £42 per barrel (£24) (in Sterling to nullify the US$ currency exchange effect). In this period FairFuel UK says retail profits per litre jumped (see graph) by 101% from 7p to 15p per litre for petrol and 269%, from 4p to 17p for diesel. During this time (23 November) petrol even reached a level of retail profit per litre of 18p per litre.

On that day the oil price hit £45 per barrel. In the last 2 years, when oil hit this price level on 34 different occasions, pump prices varied from £1.35 to £1.19 for diesel and £1.26 to £1.16 for petrol. That’s a variance for diesel of 16p and petrol 10p per litre. The question arises why can the price of fuel differ so much when oil is at precisely the same cost per barrel?

A further question posed is as to why the UK current average pump price of diesel, the essential fuel for the road freight industry, is 10p per litre more than petrol, whilst Germany prices diesel 10p less than petrol, with France 2p & Spain 4p lower than petrol. FairFuel UK and the APPG is asking why can the government insist on a body to monitor these anomalies along the lines of other consumer watchdogs Ofgem, Ofcom and Ofwat, to protect UK’s 37 million drivers every time they fill up, and give the consumer a fairer deal as and when oil prices vary?

To support its call for such a watchdog FairFuel UK is raising a petition which you can access HERE.