OFT launches diesel price probe

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The Office of Fair Trading has issued a call for information on fuel pricing in the UK after retail diesel prices rose by 43 per cent in the year to June 2012.

It said that it wants to identify whether or not there are competition problems in the £32bn market that it can tackle, and is inviting the industry, motoring groups and consumer bodies to submit information.

It plans to examine:

*whether reductions in the price of crude oil are being reflected in falling pump prices

*whether supermarkets’ and major oil companies’ practices may be making it more difficult for independent retailers to compete with them

* whether there is a lack of competition between fuel retailers in some remote communities in the UK

*whether concerns about price co-ordination and the structure of road fuels markets identified by other national competition authorities are relevant in the UK.

“We are keenly aware of continuing widespread concern about the pump price of petrol and diesel and we have heard a number of different claims about how the market is operating,” said Claire Hart, director in the OFT’s services, infrastructure and public markets group.

“We have therefore decided to take a broad based look at this sector, to provide an opportunity for people to share their concerns and evidence with us. This will help us determine whether claims about competition problems are well-founded and whether any further action is warranted.”

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It will gather information over the next six weeks, and plans to publish its findings in January 2013.

Competition authorities in other countries have identified concerns about the operation of road fuels markets in their jurisdictions. A recent investigation of the German road fuels sector by the Bundeskartellamt found a lack of intensive retail price competition, and raised concerns about the market’s structure and potential price coordination.

The Spanish Comision Nacional de la Competencia investigated the fuel sector in 2009, 2011 and 2012 finding concerns about the market’s structure, highlighting the degree of market concentration at the retail level.

The Australian Competition and Consumer Commission has started a formal investigation into price information sharing arrangements in the sector.

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