The deferred fuel duty rise due on August 1 will increase retail prices by 4ppl after 20% VAT is added, which will take £2bn out of the pockets of consumers. This will be bad for inflation, bad for household budgets, bad for the economy and bad for our members who are already suffering from both volume and margin decline. We have called on the Chancellor to abandon this increase and again cut duty in the Budget this month.
The price of Brent Crude is now over US$120/barrel and on February 23 hit an all-time pound sterling high close to £80/barrel. This results from the EU embargo on purchases of Iranian oil and the stand-off between the Western powers and the regime in Iran over its nuclear programme, and there is short-term pressure on North Sea supplies due to ongoing maintenance. Many analysts believe escalation of the political situation in the Middle East will impact negatively on crude prices with highs of US$180/barrel a worst-case scenario.
There has been another rapid build in wholesale prices with diesel hitting a record high of 143.05ppl on February 16. This is 10ppl more than the same time last year, and at 7% will dent the CPI inflation reduction to 3.6% announced by the Bank of England. Prospects are for further increases with diesel at 145ppl likely by early March. Petrol may also reach a new high next month.
Many petrol retailers contacted their constituency MPs last year to complain about the anti-competitive pricing tactics of certain supermarkets and oil companies. When approached, Ministers advised that such concerns should be addressed to the OFT.
Following discussion with the Competition Branch, a formal submission was made by RMI Petrol last month alleging a range of anti-competitive and unfair pricing/commercial practices by certain supermarkets and oil companies with evidence provided by our members.
RMI Petrol believes that the OFT should now conduct a full study into the UK fuels market to investigate our claims and take action as appropriate under the Enterprise Act 2002 because the present situation is to the detriment of the consumer. Retailers are urged to contact their constituency MPs to encourage them to write to John Fingleton, chief executive, supporting this study.