Branding petrol retailers as “damning and criminal” in these immensely challenging times is “sickening” and “desperate knee-jerk journalism”, stressed PRA chairman Brian Madderson in response to a tweet and subsequent press release from Howard Cox of FairFuelUK.
The FairFuelUK media communications claimed that fuel wholesalers and oil companies were still keeping retail margins much higher than necessary during the coronavirus crisis while the media were still ignoring this “profiteering”. He reiterated his campaign for an independent fuel pricing watchdog, claiming the conclusion of the Office of Fair Trading’s 2013 inquiry into fuel price competition - that the market was operating well - was “absolute claptrap.”
With oil prices dipping below $20 a barrel fo the first time in 18 years - having recovered from an unprecedented negative situation as oil producers ran out of space to store the oversupply of crude left by the coronavirus crisis - Cox said the UK’s fuel supply chain had “dishonestly held back March’s massive wholesale falls from filling up at the pumps. Petrol should be 98p and diesel106ppl, instead it is averaging 10ppl higher.
“Even with 70% less fuel being sold, the dishonesty from these faceless businesses, using the Coronavirus crisis as a smokescreen to maintain their profits, beggars belief,” said Cox.
Madderson subsequently slammed the comments, stressing that the target of many petrol stations remains to keep open and provide continuity of service: “There is speculation from some motoring organisations and lobby groups that UK fuel prices will tumble fast as a result of the historic event in North America yesterday when the value of oil moved into negative territory. However, with such low demand for road fuel, most petrol stations would risk their financial viability if they had to reduce prices still further. Instead of 100 closures, we could envisage 1000 closures, severely disadvantaging so many of the essential frontline workers.”
Madderson said across the UK thousands of small, often family owned rural petrol stations were desperately trying to stay open to provide fuel to all their regular, essential frontline customers working as nurses, doctors, midwives, carers and many more key jobs.
“These petrol stations have been hit very hard by the biggest, quickest drop in demand that any of us has ever witnessed, and by their own staff problems of self-isolation and family illness, so it is a real struggle to keep open.
“For some of our members, this demand drop has been as much as 85% of normal volume leading to a huge cash flow crisis. The sector is unique with over 70% of income comprising Government tax from fuel duty and VAT. There is a Cash Grant of £25,000 available to small and medium size petrol stations but this is swallowed by the next delivery with a tanker needing over £26,000 just to pay the tax.
“It is no wonder that up to 100 petrol stations, mainly in rural areas, have already had to close their doors.”
RAC fuel spokesman Simon Williams said: “The oversupply of oil continues to suppress the barrel price and it’s clear now that plans by some of the world’s largest oil-producing nations to limit production haven’t yet been enough to lift the price – there’s currently too little demand for oil in the first place.
“It’s right that retailers charge a fair price for fuel that reflects the price of the raw product, and in theory petrol prices could fall below £1 per litre if the lower wholesale costs were reflected at the pumps – but at the same time people are driving very few miles so they’re selling vastly lower quantities of petrol and diesel at the moment. This means many will be at pains to trim their prices any further.
“We also continue to be concerned about smaller forecourts that provide a vital service in areas where the supermarkets don’t have a foothold as many are already finding conditions tough with sales having fallen off a cliff since lockdown. It would be bad news all round if these forecourts shut up shop for good.”
Meanwhile FairFuelUK continues to demand an independent pricing watchdog: "A few hoodwinked MPs have responded to FairFuelUK’s concerns for 37m drivers,” claimed Cox.”They say they believe that the most effective way to keep fuel prices down is through an open and competitive market. In 2013, the Office for Fair Trading investigated competition in the UK fuel sector and concluded that it was operating well. That is absolute claptrap. That enquiry was an utter whitewash and everyone knows it had the smell of big business manipulating the result."
"It’s time the Government really looked after the highest taxed drivers in the world and our vital haulage industry, and introduce PumpWatch as a matter of emergency. An independent pricing watchdog is vital to protect our economy and allow essential workers to fill up their vehicles with the fairest and most honest prices at the pumps.”