Comment: Pump prices fuel anger 18 | 02 | 2011

    IT WILL COME as no surprise to you, but we're being pretty well taken for a ride when it comes to the price of filling up our cars with petrol or diesel. While average pre-tax petrol prices in seven of the UK's nearest European neighbours fell by 4.3% between the middle and end of January, in Scotland and the rest of the UK the price has INCREASED.

    In the AA's latest fuel price survey, petrol hit another record high price earlier this week increasing by 0.54p in a month to average 128.81p across the UK. We were slightly more fortunate in Scotland, up by just 0.9p to average 128.6p.

    Diesel has also reached a new record UK average price of 134.01p, up 1.26p on mid-January. In contrast to petrol, Scotland's average diesel price was slightly higher, rising 1p to 134.2p.

    Let's put this in perspective: 12 months ago petrol cost on average 112.10p a litre and diesel 113.84.That means it now costs an extra £8.36 to fill a typical 50-litre tank with petrol and an additional £10.09 for diesel.

    Quite why we're paying even more for our fuel isn't clear, apart from blatant profiteering by supermarkets and filling stations. Consider this: even with wholesale prices increasing again this month, the European average petrol pump price on February 7 was still 3% lower than three weeks before, while in the UK, petrol cost 0.8% more and reached new record highs.

    We all know there's around 80p of UK tax levied on every litre of fuel we buy from the pumps, but what's infuriating is that a recent 2p-a-litre cut in the wholesale price of petrol has not been passed on to the motorist by supermarkets. Even more confusing is the fact that despite wanting to cut pump prices, independent garages have not taken the initiative because of their "cosy" relationship with the supermarkets.

    Their combined lack of action — and fairness — isn't just hurting drivers, but it's penalising the country. It's believed a 2p drop in prices would have cancelled out most of the impact of last month's 2.5% VAT rise, and also reduced pressure on inflation and the threat of a rise in interest rates.

    The range of prices at the pumps varies significantly. Having driven from Oxford to Glasgow earlier this week, I saw the price of a litre of diesel range from 132.9p to 143.9p.

    "Whether retailers are trying to compensate for lower volumes of sales, our supermarkets are choosing to convert fuel-cost savings into cut-price toilet cleaner offers," AA president Edmund King said. "European fuel retailers, including France with its aggressive supermarket pricing, are under similar strains, yet they passed on much of the wholesale petrol price reduction. They also reduced diesel prices for a while.

    "With record fuel prices a key influence on rising inflation, the AA again calls for a published track of wholesale versus pump prices, as is available in the United States, Australia and south-east Asia.

    "As well as the scrapping of the fuel duty increase on April 1, the AA calls for a fuel price regulator, as is available with domestic energy — not to tell retailers how much they should sell their fuel for, but as an honest broker between markets, retailers and consumers, to help clarify price movements and price differences between neighbouring towns."

    It's clear the filling stations across the country are working in cahoots with each other to regulate the price of a litre of fuel; it's time the Scottish Government, for once, got off its backside and did something positive to help not only the motorist, but help cut transport costs which in turn will help reduce prices in the High Street.

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    Jim McGill

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