The UK Petroleum Industry Association (UKPIA) has today drawn attention to the UK’s competitive pre-tax fuel supply sector, in response to calls for the creation of a fuel price watchdog.
The UK fuel market is a competitive one[1] that over the years has delivered fuels reliably at wholesale (pre-tax) prices among the lowest in Europe[2]. Whilst, the fuel pump price in the UK is over 60% tax[3], very strong competition in the UK market means that the price people pay is closely linked to the price of crude oil.
UKPIA strongly believes that the consumer gets a deal that fairly reflects the global oil price and that renewed calls for the UK Government to intervene to create a watchdog to track the prices that consumer pay are misplaced.
The strong competition in the UK is a great asset and the highly efficient supply chain that it has created is able to reliably deliver hundreds of millions of litres to the consumer every day.
UKPIA spokesperson Jamie Baker, said “The price of fuel is being questioned yet the evidence time and again shows that prices excluding duties and tax have been among the lowest in Europe for a number of years, showing the consumer gets a good deal. The UK has a well-established, efficient and highly competitive supply chain meaning that the final pump price will be a fair reflection of the real costs involved.”
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- The UK Petroleum Industry Association (UKPIA) represents eight oil refining and marketing companies that operate the six major oil refineries in the UK and source over 85% of the transport fuels used. UKPIA members also own around 1,250 of the UK's 8,476 filling stations in the UK.
- [1] Fuel retailing in the UK remains a high volume, low margin business due to intense competition in the sector. This competition was looked at in depth by government in 2013 when the Competition and Markets Authority (then the OFT) published its report on the “UK petrol and diesel sector” with a key finding being: “Overall, on the basis of the evidence collected, it appears that competition in the UK road fuels sector is working relatively effectively. The UK has some of the cheapest prices in Europe before tax and duty, and increases in the pump prices of petrol and diesel over the past 10 years have been caused largely by higher crude oil prices and increases in tax and duty. The margins being made by UK refiners, wholesalers and retailers do not appear to have contributed as significantly to increases in pump prices”
- [2] According to BEIS published statistics, pre-tax prices for unleaded petrol in the UK were in the top 2 (lowest) prices within the EU-15 for December 2018-February 2019 and top 5 for diesel. These trends go back throughout BEIS data which stretches back to 1999.
- [3] UKPIA analysis using BEIS weekly road fuel price data: https://www.gov.uk/government/statistical-data-sets/oil-and-petroleum-products-weekly-statistics