Fuel – what goes up is not coming down
The sheer number of television programmes, which defend the public from being ‘ripped off’, strike a clear chord with viewers, who relish witnessing the dishonest receiving their comeuppance. From unscrupulous sole traders to multi-national conglomerates, it is harder to get away with overcharging and profiteering than it ever was, especially since the birth of social media and online review sites.
So why is it that petrol (and diesel) costs, one of the largest monthly expenses for the average household, are not placed under more intense scrutiny? Kathryn Cooper, Economics Editor of the Sunday Times, clearly smelled something suspicious, when she reported, on the 28th May, that motorists are losing nearly £2 million per day. The cause? Fuel retailers are not passing-on the falling wholesale prices quickly enough, especially when they are all too eager to make increases almost immediate. She explained that many outlets passed-on wholesale price rises within a fortnight, when falling costs took over a month to reach the motorist, at the time of her writing.
The UK Government conceded that it is clear that powerful people are profiteering at the expense of the British motorist. According to Ms Cooper in late May, “The oil price has dropped 10% from around $120 (£76) a barrel in mid-April to $107 (£68), but drivers have yet to feel the full benefit at the pumps. The price of petrol is down only 4.9% at an average of 135.44p.”
Interestingly, since the wholesale price of petrol reached its zenith in April, UK motorists were paying a higher pre-tax cost for fuel than all other countries in Europe and yet other nations have been taking action to help consumers benefit from reductions in wholesale prices.
Cooper reported that the German government intended to force retailers to log price information, to allow consumers to evaluate if they are being overcharged, a strategy that the Austrians adopted last year. Yet, the UK Government does not appear to be as supportive. Instead of encouraging a reduced burden of fuel costs, the planned 3p per litre tax increase is still scheduled to take effect from August (at the time of writing, although rumours abound that it might be dropped). If that goes ahead, the move might, perversely, reduce the total tax take from road fuel, as hard-pressed private and business users scale back on their activities. Maybe the UK Government should appear with petrol retailers on the most recent ‘rip off’ TV shows? Now that would make for entertaining viewing…