The early part of the summer saw crude and wholesale prices falling quite rapidly, which provided some relief to the retailer’s gross margins. However, responding in knee-jerk fashion to ill-informed press comment, Justine Greening MP (Secretary of State for Transport) burst onto the media scene demanding that retailers reduce their pump prices faster to give motorists a ’fair deal’.
She also obtained support from Ed Davey MP (Secretary of State for Energy and Climate Change) with a joint letter to retailers asking that they propose a Voluntary Code of Conduct which would ensure faster price reductions in falling markets. The PRA robustly rejected the proposal and demanded that both departments engage with the industry to review the reality of our independent forecourt business.
It is good to report that the PRA is now engaged with senior officials to review wholesale and retail price mechanisms.
After the falling market, we were all reminded of the increasing volatility of commodity markets as the price of Brent Crude soared by over 10% from late July to mid-August, while the whole of the UK was absorbed in the London 2012 Olympics.
This move had already started in the wholesale fuels’ arena, with retail rapidly increasing by 10ppl for both grades in a matter of weeks. In one 24-hour period, petrol rose by 1.6ppl, which is very difficult for independents purchasing on a daily Platts-plus basis. Do we now have government proposing a Voluntary Code of Conduct to ensure retailers increase prices?
What next? Worryingly the decision to defer the August duty rise to January brings the spectre of back-to-back tax increases in the first quarter of 2013.
In a ground-breaking initiative, the PRA has joined with the Taxpayers’ Alliance to campaign against any further fuel duty rises. Central to the campaign are the fuel tax stands which have been issued free to independent retailers (see pages 10 and 11).
This campaign is being fully supported by The Sun. We also have support from Robert Halfon MP, who is organising a debate in the Main Chamber of the House of Commons this month, which will be attended by more than 65 MPs from across all parties.
The fight for a fair deal for independent forecourt retailers continues!