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OFT ruling on UK fuel price reinforces fuel efficiency argument

So it’s official: our fuel prices are fair and competitive after all. The OFT has ruled that, despite fuel going up from 76p per litre to £1.36p per litre in a decade (yes, it really was that cheap in 2003), there’s nothing wrong with how the market is working. There’s no need for official action and thus no hope they’ll come down any time soon.

Why’s that, then? Well, because if you take away tax, the UK actually has some of the CHEAPEST road fuel prices in Europe. It’s the vast amount taken by the Government that means our fuel prices are so high – second-highest diesel price in Europe, for example – rather than any dodgy practices taken by the fuel companies.

This much, we already knew, in part. It was the fact SO much is being taken by the Government, and thus making it look as if our fuel price market isn’t working, that’s the sobering fact. And, as we’re living in austerity Britain, with Government deficits and triple dip recession threats and all that, they’re not likely to fall any time soon, either.

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So, the only way to save money on fuel, it seems, is to buy a more fuel efficient car. Luckily, car manufacturers have been doing plenty here, partly offsetting the fact fuel prices have nearly doubled in a decade. Look at some ranges of car and you can get vastly improved fuel economy from an engine producing the same power, with vastly reduced exhaust emissions thrown in for free.

Evidence? Look at the Ford Focus diesel of a decade ago. It had a 100hp 1.8-litre TDdi engine, averaged 53mpg and emitted 140g/km CO2. Today, the 1.6 TDCi offers 5hp more, can average 83mpg and emits 88g/km CO2. OK, that’s not a doubling of economy, but it is a 55% improvement, effectively for free. Throw in road tax savings and a new car will more than partly offset today’s extra fuel spend.

Thank goodness for the car makers, huh?

Other facts in the OFT report answer motorists’ other fuel price frustrations. Motorway fuel prices are really expensive, sometimes over 8p a litre (yes, a litre) more expensive than high street prices. Why’s that? Because of the high cost of shipping fuel there, says the OFT, which ‘to some extent’ excuses them.

Ford Focus 88GKM co2

The lack of competition is surely also a factor, though. After all, it’s hardly possible to have a supermarket filling station situated right next to a motorway, is it? So, to partly cure this where it can, the OFT wants the DfT to investigate new road signs, that display the fuel price before you leave the motorway. This means the eye-watering prices charged by motorway services would be displayed to all, giving everyone the chance to avoid them where possible. One small step to making motorway services operators realise we’re not going to put up with being fleeced like this?

The OFT also points out that we have fewer filling stations than a decade ago – 8,677 in 2012, rather than 10,867 in 2004. This lack of competition may not be helping keep fuel prices in check, although the rate of decline has slowed in the past three years, it points out. And where filling stations HAVE closed, competition still appears to be strong.

Not if you’re one of the people so affected by there being 20% fewer filling stations, mind. Good job modern cars, with their green agenda and fuel efficiency, have such stretched ranges, then. Indeed, this may not actually be helping the case for new age green cars – if we’re getting used to modern cars going further between fill-ups, then the prospect of buying one that goes far, far fewer miles before ‘a fill-up’, such as an EV, becomes increasingly inconvenient by comparison…

Really, though it all seems down to us: if we want to keep our fuel bills in check, we have to do it ourselves. The prices fuel companies charge, while steep, are apparently perfectly fair and proper, and nobody has any questions to answer – no, not even motorway service station operators. Some may find it hard to believe, but that’s the result of a presumably multi-million pound investigation, so we have to take it as read.

Green cars come to the fore once again, then. As we know, green cars are, by their nature, also highly fuel-efficient cars. So as car makers continue to push boundaries and drop beneath ever-stricter CO2 targets set both by the government and Europe, so we can benefit from saving the planet by also saving cash at the pumps.

Fuel prices are probably going to go only one way from now. The government won’t take any less in tax; crude oil probably won’t get any cheaper and there’s nothing wrong with how the UK road fuel market operates. Time to swap the 1.6 petrol Focus for a 1.6 diesel, then, and get saving…

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Richard Aucock

Filed under: Weekly Column

2 comments

Tom Wood

I'm not entirely sure I understand the reasoning behind the motorway service-stations being harder to get to.. Surely the petrol companies' trucks have to travel the motorways anyway, unless all fuel is delivered to petrol stations by way of sewerage system? It's not a big country we live in, and nothing is that hard to get to.. So the high cost of shipping fuel there sounds a bit of a cop-out to me.. right?

Michael stevens

We do not require petrol price signs on Motorways, everyone knows that prices are very
much higher on motorways. signs are a wast of money.
Over 75% of drivers do not drive economically and consequently are not that worried about price.

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