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MP: 'Rural fuel prices are not sustainable'

By Western Morning News  |  Posted: January 31, 2013

Comments (7)

Rural motorists were left with little hope of reduced fuel bills yesterday after an official report found pump prices were 2p-a-litre more expensive in the countryside but concluded the market was "working well".

The Office of Fair Trading, which investigated whether there were competition problems in the sector, said rises in pump prices over the past decade were largely due to increases in tax and the cost of crude oil.

It reported "very limited evidence" that pump prices were quickly hiked by retailers when the wholesale price rose but fell more slowly when it dropped and ruled out further investigation.

The OFT recognised competition in rural areas like the Westcountry was weaker and found petrol was around 1.9 pence per litre more expensive and diesel around 1.7ppl more expensive in rural areas than in urban areas.

A number of factors were to blame, according to its report, including fewer competitors, higher transport costs for getting fuel to rural forecourts and lower throughputs.

But its conclusions, that the market was operating properly, were of little comfort to hard-pressed drivers in rural Devon and Cornwall where public transport is sparse and vehicle ownership is regarded as a necessity.

St Ives Lib Dem MP Andrew George said the Government had asked the OFT to investigate the "wrong question".

"I think we as a Parliament need to be asking a different question," Mr George said. "Are these fuel prices sustainable even if these retailers are behaving properly? The answer to that is no."

The TaxPayers' Alliance said the report confirmed that the real issue with the price of fuel, including in the countryside, was high fuel duty.

"For people living in rural communities having a car is not a luxury it is an absolute necessity for people to go work, get their children to school or do the shopping," an alliance spokesman said.

"If the Government wants to help people who are struggling to meet those costs the easiest way would be to reduce fuel duty."

The OFT launched a call for information on the fuel sector in September last year to determine whether there were competition problems that need to be addressed before investigating concerns over the prices charged for petrol and diesel at the pumps.

It highlighted how the UK had some of the cheapest pre-tax road fuel prices in Europe, noting that in the ten years to 2012 pump prices increased from 76ppl to 136ppl for petrol, and from 78ppl to 142ppl for diesel, caused largely by an increase of nearly 24ppl in tax and 33ppl in the cost of oil.

But the competition watchdog's decision not to hold a full investigation into the fuel market was greeted with anger by campaigners.

RAC technical director David Bizley said: "UK consumers have seen a 38% increase in the price of petrol and a 43% increase in diesel costs between 2007 and 2012.

"The reasons behind this massive rise need to be conveyed clearly to the motoring public and justified so that households, businesses and the economy as a whole are not harmed by ever-increasing pump prices.

"It is a great shame the OFT has not taken this opportunity to instigate a full investigation into this issue which many motorists view as daylight robbery."

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  • Charlespk  |  February 02 2013, 7:06AM

    Sidney, you clearly aren't a countryman are you. And you obviously didn't require any help during the recent extremely inclement weather. Are you aware of any of the problems agriculture is facing? Penalising 4x4s, a rural essential for many people, is just adding salt to the wound.

    |   -8
  • SidneyNuff  |  February 01 2013, 10:50PM

    What a romantic you are Charles. 4 x 4's an essential. Get the latest copy of country life out.

    |   5
  • Charlespk  |  February 01 2013, 6:59PM

    @Cottage Farm Organics @ http://tinyurl.com/al3au36 Whilst the Chinese are opening a new coal fired power station every month or so, I think you are just whistling in the wind.(A bit like a Wind Turbine). But penalising 4x4s, a rural essential for many people, is just adding salt to the wound.

    |   -9
  • robocop1982  |  February 01 2013, 2:12AM

    get an electric bike kit. if you can do without the car its a good thing. LIfepo4 batteries have 2000 cycles. not enough people in the uk tend to use transport like electric bikes. a car is only essential for certain people and particularly those hauling lots of cargo. THe cost of fuel is getting beyond the joke and its costing people more to fuel their vehicles than the actual value of the car on old cars. get a carbon fibre e bike

    |   -15
  • Cottage Farm Organics  |  January 31 2013, 1:57PM

    Oh dear, George got it wrong again! The question is not 'Are these fuel prices sustainable?', the question is 'Is our current lifestyle sustainable? And the answer is obviously NOT. How can it be? Almost everything we do is based on fossil fuels, which are a non-renewable resource and therefore, by definition, unsustainable. Further more, burning the stuff is sentencing future generations to hunger and misery through global warming leading to sea rise of 18m plus and desertification of the planet. That is why it is our duty to our kids, grandchildren and future generations to switch as rapidly as possible to sustainable lifestyles based on renewable energy powered by wind, sun, AD plants and, when sufficiently developed by wave and tide power, supported by pumped storage in the china clay region and other energy stores to retain excess power for times with no sun and wind. That's how we may yet end up with a prosperous Cornwall.

    |   18
  • SidneyNuff  |  January 31 2013, 9:27AM

    They are only 2p more expensive in the countryside because the source of cheaper petrol, the supermarkets, are situated on the edge of towns, in urban areas. If you have a car and live in the countryside you probably travel to a supermarket at least once a week, you simply fill up then. The problem is high fuel prices and has nothing to do with the countryside being poorly treated. The government tax the motorist highly yet offer huge fuel tax breaks for airline companies. So this has nothing to do with the green argument of taxing polluters as the huge polluters are encouraged.

    |   6
  • ramehead  |  January 31 2013, 9:10AM

    The cash cow says enough is enough Gideon! Easy to deal with if you're a MP, just slap it on expenses!

    |   -9