It wasn’t quite the response he was looking for, but at least the Office of Fair Trading didn’t completely slam the door in Brian Madderson’s face when considering whether to conduct a market study into road fuel retailing (see News Extra).
Brian and his team at the RMI have another six weeks to come up with something more convincing than they’ve supplied thus far to persuade the OFT of the need for a new study. The last one was in 1998 and it didn’t go in the independent fuel retailer’s favour the conclusion was that the market was operating competitively and did not warrant intervention at the time.
That report was referred to in the OFT’s current provisional response, where it noted that since its last report the two largest types of supplier of road fuels hypermarkets and oil companies have not changed... and therefore competition is acting to the benefit of consumers by constraining prices in road fuels in the UK.
It was Chancellor George Osborne that sent Brian off to the OFT following his many missives about predatory pricing and unfair competition in the market. But with the OFT’s mission to make markets work well for consumers, how likely is it that it will see anything wrong in supermarkets and oil companies selling fuel at a lower cost than independent sites. How can that be bad for consumers? Certainly not in the short term.
Brian has now got to dig deeper and see if he can find evidence of locations where the predatory pricers have put the local competition out of business, and, with no one to challenge, have put prices up.
He will also be popping back to Mr Osborne to see if he can recommend anyone else to take his concerns to before more sites go out of business and further undermine the country’s ’energy resilience’.
The threat of a strike by tanker drivers has not gone away. It was hoped it might have a positive influence on the OFT’s decision maybe it did, the door’s not shut; and maybe it will continue to do so.