Rocket and feather syndrome has become indistinguishable with the price of filling up our cars, vans, and trucks. The global cost of oil rises, and pump prices increase almost immediately, yet when oil prices drop, petrol and diesel take weeks to fall and usually by nowhere the same amount they had previously risen by.
The fuel supply chain has for decades ridden roughshod over UK’s 37m drivers. And the government has allowed them to do it. The commercial heartbeat of UK Plc, fuelled almost entirely by diesel is in particular, being fleeced at will. Driving up inflation and impacting negatively on our post covid economic recovery.
Shockingly, the UK is the only country where diesel prices are higher than petrol. That’s because other nations tax diesel less than petrol, incentivising their economies with lower transport costs. It’s a fiscal no-brainer, but our Treasury can’t see that. Germany prices diesel 10p, France 7p, Italy 8p, Netherlands 8p, Ireland 15p, Spain 29p, Slovakia 31p, USA 76p, ALL less than the UK.
And then there is the chronic influence of profiteering speculators, gambling on the global oil supply uncertainty due to the Ukrainian conflict, along with high fuel taxes, hitting us all hard.
According to data sourced from the RAC Foundation and FairFuelUK’s national panel at the end of 2021, average profit margins for diesel increased by 150% in 2 years, with petrol margins at the pumps more than doubling.
FairFuelUK reported in December 2021, pump prices were 30p per litre more than Christmas 2020, yet wholesale costs of petrol and diesel were up, just 18p. The RAC agreed with FairFuelUK, even allowing for market increases in margins and distribution costs, the world’s highest taxed drivers were paying up to 10 pence more than needed in recent months.
And those greedy margins to date have not subsided one iota. Oil prices neared $140 a week ago and you guessed it, pump price hit those widely reported record highs. In some retail forecourts, drivers watched price signs increasing by 20p, right in front of their eyes.
But, in just 24 hours, oil dropped $30 and is even now, on March 15th, at $98. Oil has indeed fallen significantly and rapidly, but that’s nothing to do with any geo-political event. No, it’s simple fuel supply chain frenzied manipulation. True to form the insidious rocket and feather tradition rears its ugly head, by taking advantage of Putin’s invasion, those faceless fuel supply chain businesses are keeping pump prices at their record highs, despite the crash in oil prices.
Even considering exchange rate changes since 2014 when the dollar price for a barrel of Brent Oil was similar to current prices, diesel and petrol are now up to 20p per litre – much higher than necessary. This perennial and sickening exploitation of drivers is driving up inflation and impacting negatively on our post covid economic recovery.
Sadly, the smaller independent garages are subject to pricing blackmail too, in what they are forced to pay. Their wholesalers hold them hostage to their bulk supply and what they can charge motorists at the pumps. These businesses consciously hold back oil and wholesale price falls and ramp up bulk supply costs when oil prices rise, amounting to billions of manipulative changes to fill their already gold lined pockets.
We call on the Government to create an Independent Pricing Watchdog called PumpWatch. If gas, electricity, water and telecoms get price protection bodies, why shouldn’t motorists have one too? We need ‘PumpWatch’ now, to ensure pricing fairness for both consumers and hardworking fuel retailers too.
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When oil prices rise and fall, millions of drivers have absolutely no idea what subsequently, they will pay at the pumps each time they fill up their vehicles. It is never ever the same price! There is no consistency, logic or clarity to the way pump prices are calculated. It remains a closely guarded secret in the fuel supply chain. PumpWatch is overdue!
Shell and BP rub even more fiscal salt into consumers’ skyrocketing cost of living. UK’s biggest oil companies raked in £10.2bn in just 3 months last year. The Treasury is, of course, relishing the huge windfall VAT receipts generated by Shell and BP’s high pump prices. The foul stench of corporate greed lingers stubbornly over hard-pressed motorists still treated relentlessly as the easiest of cash cows by politicos and profit-making concerns.
Even Biden’s administration suspects that foul play in the US fuel supply chain may be driving up the price of petrol. He has called on the Federal Trade Commission, something akin to our impotent Competition and Markets Authority, to look into whether illegal conduct is driving up the cost of pump prices. Just like here in the UK, Americans are seeing rising costs, from prices at the pump to shopping at grocery stores. FairFuelUK calls on the Government to commission the CMA to do the same type of inquiry here in the UK. Greedy oil companies and the complete UK fuel supply chain must explain how they price petrol, diesel, heating fuel etc as and when oil prices change.
The perennial scandal that FairFuelUK has been campaigning against for the last decade needs solving. PumpWatch is now even more crucial to the Nation’s positive economic growth, jobs, business investment, logistics, consumer spending and social mobility. This beleaguered Conservative Government needs it in place now, to help regain trust again and to avoid long-term voter repercussions. Boris knows this makes economic and political sense. It’s time for him to throw away the Government’s anti-motorist plans and recognise the common sense in giving drivers a well-deserved cost of living break.
Additionally, FairFuelUK’s immediate call to the Chancellor is for an urgent cut in Fuel Duty of at least 5p per litre. Thousands of the campaign’s supporters have emailed their MP asking for a reduction in the cost of filling up too.
FairFuelUK also backs the Road Haulage Association’s call for an essential user rebate of 15p per litre.
With PumpWatch, all three of these asks are vital to alleviate the increasing pain in ALL our costs of living. When implemented, they will slow inflation, keep businesses viable, secure jobs and protect the economy, without reducing income to the Exchequer.
Howard Cox is Founder of FairFuelUK and Secretary to the APPG for Fair Fuel for Motorists and Hauliers