According to campaigners and some MPs, the UK needs a petrol and diesel watchdog to monitor filling-station prices and to stop motorists getting ‘taken for a ride by greedy oil companies’.
An online petition for an independent body called ‘PumpWatch’ comes from the motoring campaign organisation FairFuelUK and has the support of the All-Party Parliamentary Group for Fair Fuel for Motorists and Hauliers (APPG). However, do taxpayers want another quango to oversee fuel prices like the scrutiny faced by utility providers and would such a committee truly save drivers money at the pumps?
Studies of data by the groups suggest that wholesale unleaded and diesel costs dropped by 14 and 13 per cent for petrol and diesel respectively, with average pump prices only falling by seven and three per cent, and pump prices 4-5p more expensive than required.
FairFuelUK says, in the first nine months of last year, the retail profit of petrol averaged at 8p per litre and 8.6p per litre for diesel, increasing to 13.27p per litre on petrol and 11p per litre for diesel in the last quarter of 2018.
Read PetrolPrices.com fuel price review of 2018 here.
Fuel retailers haven’t passed these savings on to motorists, earning the fuel industry £600million more in profit and—as put by FairFuelUK—a ‘VAT bonanza’ to the Treasury of an extra £100 million in tax revenue.
Established by political lobbyist and secretary to the APPG, Howard Cox and managed by motoring broadcaster Quentin Willson, FairFuelUK says PumpWatch would inform drivers about wholesale oil prices and pressure retailers to pass on savings due to motorists when prices drop.
You’ve been quangoed
The APPG suggested petrol stations that charge ‘fair prices‘ would have the right to display a kitemark logo, but Brian Madderson, Chairman of Petrol Retailers Association (PRA), said while the idea might be ‘well-meaning’, it would be ‘pretty impracticable’, saying:
“Who is going to check prices at 8,500 forecourts? And if you have a kitemark, what’s going to be the acceptable margin?”
He described the PumpWatch proposal as ‘totally impracticable and nonsensical’, noting that it isn’t the first time both FairFuelUK and the APPG have called for such a supervisory body— and had it rejected by the government.
Mr Madderson added: “The proper body to look into unfair pricing of retail fuel would be the Competition and Markets Authority. It has no plans to launch a new inquiry as its previous inquiry found no evidence to support anti-competitive pricing allegations.”
He added: “No Government body or quango should be in a position to enforce control of fuel margins across such disparate businesses as this would undermine free market principles.
“If a motorist does not like the price at any particular filling station, he or she has plenty of other price options—thanks to the free market which should continue without interference,” and pointed out that low-volume petrol stations in rural areas needed a much higher profit margin than those forecourts selling high volumes of fuel.
“If people don’t like high prices, they can go to a cheaper forecourt,” he added.
Meanwhile, supporters of PumpWatch say motorists need to feel reassured they aren’t paying too much for petrol and diesel and say the proposed watchdog would mean fuel retailers charge people in rural areas the fairest prices.
FairFuelUK’s Howard Cox said: “When oil prices rise and fall, millions of drivers have no idea what, subsequently, they will pay at the pumps each time they fill up their vehicles. It is never the same price, even when the cost of oil is stable. There is no consistency, logic or clarity to the way the pump prices are calculated. It remains a closely guarded secret in the fuel supply chain.
“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 to both consumers and hardworking fuel retailers too.”
Creating a diversion?
Quangos, or to give them their full name — Quasi-Autonomous Non-Governmental Organisations — are organisations funded by taxpayers, but not under direct control of central government.
While certain quangos are a good thing — because it’s better for people who aren’t politicians to carry out certain actions — many say they‘re often mere political schemes, which cost taxpayers billions of pounds each year to operate.
While motorists may, at first, see a watchdog for diesel and petrol prices as a positive move for the consumer, the fact is that fuel retailers take the smallest part of the mark-up because the price of fuel is already so expensive before reaching the forecourt, leaving little room for a large profit margin.
Many drivers hit back at the news of the proposal saying fuel retailers aren’t alone in ‘chronic opportunistic profiteering’; so too are the government who take huge profits in the form of both fuel duty and VAT. Some drivers have even suggested a ‘fuel tax watchdog’ would be more useful to bring fuel duty down to a more reasonable level.
Another common public response to the call for a petrol and diesel regulator seems to be that consumers can already find the cheapest fuel in their area by using services provided by websites and apps like ours. If you haven’t already, download the app today, so you always know where to get the cheapest petrol and diesel in your area.
What’s your view of the proposed ‘PumpWatch’? Would a fuel price watchdog affect how much you pay for petrol or diesel? Let us know your opinions in the comments.