January’s Office of Fair Trading (OFT) report on the road fuel market has been seriously undermined by new market share figures for supermarkets released by the Government.
They show the supermarkets have a far higher share of the road fuels market than previously admitted.
The latest combined total for petrol and diesel sees an increase to 46.5% in 2012. This compares with 39% for 2012 stated in the OFT report, which gave a clean bill of health to the way the market operates.
The figure of 39% was also reported for 2011 in a report by Deloitte – Study of the UK petroleum retail market. This report was commissioned and published last year by the Department of Energy & Climate Change (DECC), and was used by DECC as proof of the security of UK fuel supplies.
The PRA said it was told the statistical data on retail fuel volumes since 2008 has recently been revised on the DECC website, after gross reporting errors were uncovered by officials.
PRA chairman Brian Madderson commented: “5,000 forecourts have closed since 2000, another 175 closed last year and the independent retailers are continuing to get massacred by the aggressive discounting and below cost sales tactics by supermarkets.
“There was considerable complacency evident in the Deloitte and OFT reports which assumed that supermarket volumes were levelling off and so the market was steady. However, we warned Government that the 2012 Christie study indicated that supermarkets are trying to open up to 50 new forecourts for each of the next four years.”
“The data revision indicates that the average hyper sells 12 million litres per year and independents 2 million litres. Thus every new-to-industry opening by a hyper could suck up the entire fuel volume of six independent retailers in the local area and jeopardise the business of at least 10 existing forecourts every year if such expansion proceeded. This is will be bad for competition, bad for consumer choice, bad for jobs at local family firms and bad for rural communities.”
Madderson added: “This re-jigging of key market information underpins our members’ real concern that the UK’s energy resilience for retail fuels is at stake. If this situation is allowed to continue, there will be an inevitable acceleration in the number of site closures to more than 300 per year. Thus there will be a severe worsening of supply resilience from fewer sites with low stockholdings.
“This should ensure that our request to DECC for a round table review of the independent forecourt industry will receive the full attention of Michael Fallon MP, minister for energy, in the coming weeks.”