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Petrol retailers to hand allegations of manipulation to European investigators

Allegations of “malpractice” in the oil market that could have cost drivers hundreds of pounds will be handed over to European investigators by a group representing 5,000 independent garages.

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Screen Shot 2013-05-17 at 01.06.41By Rowena Mason, Political Correspondent: 12:01AM BST 23 May 2013

The Petrol Retailers’ Association said it has turned to the European Commission after British authorities failed to act on its “formal and detailed complaint” alleging “anti-competitive practices” in the oil and petrol markets.

The European Commission last week raided the offices of BP and Shell in London over suspicions oil companies have “colluded” to distort fuel prices. The companies have confirmed they are fully co-operating with the investigation but cannot comment further while the investigation is underway.

In a letter to Alexander Italianer, director general for competition at the Commission, the PRA said allegations of oil price fixing are “an issue of fundamental importance to our members and our customers”.

It offered to make all its analysis of pricing available to the European Commission’s investigating team, which was presented to the UK’s Office of Fair Trading last year.

Brian Madderson, chairman of the PRA, said there have been several periods over the last year in which rises in the UK wholesale price appeared to bear no relation to international circumstances.

“At one point the wholesale price went up 8p for no rhyme or reason,” he said. “About 1.5p to 2p of that could have been explained by the weakening of pound sterling but not the rest. The demand levels globally were not that strong, there were no geopolitical events that could explain it. This was one of the concerns we sent to the Office of Fair Trading.”

The intervention came as the AA, called on the Government to find a way to give motorists advance warning of spikes in the petrol price.

The motoring group urged David Cameron’s new policy unit to consider ways of publishing a more transparent wholesale price for petrol so families can plan ahead and buy their fuel when it is cheaper.

It said the cause of spikes in the petrol price could be uncovered by a European Commission investigation into whether there has been “systematic manipulation of oil and fuel prices”.

However, until that inquiry is complete, the Prime Minister must act to help motorists cushion themselves against fuel price shocks, which have caused petrol to rise to record highs of more than 140p per litre at some points.

The Treasury should have an incentive to act as taxes from petrol sales collapses when drivers cut back on their car usage, the AA said.

It found lower prices at the pumps have pushed up petrol sales in recent weeks.

Edmund King, president of the AA, said: “Three pump price surges, three pump sales crashes – the official figures don’t lie.

“The Office of Fair Trading called them ‘price shocks’ and the failure of petrol sales to rebound as strongly as they did last year suggests that drivers remain stunned even when prices on forecourts go down.”

“Unless the ongoing EU investigation into fuel pricing, called for by the AA two years ago, can uncover systematic manipulation of oil and fuel prices, the drivers’ only defence would be a transparent wholesale price.”



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