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AA calls OFT report on Petrol Pricing "a whitwash"


SillBill

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I tend to agree with the AA on this, when the government rakes in 60% of the price in Duty and VAT, what is there left to play around with? Although the Oil companies are not squeaky clean either, falling crude prices don't make their way to the pumps as fast as when crude prices go up.

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morddwyd

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The AA depends for its very existence on motorists.

It's hardly likely to come out and say "All of our customers are a bunch of whining skiinflints, and this report proves it"!

Take off the tax and petrol prices here are among the cheapest in Europe.

It's not the big bad oil companies but our caring, sharing "we're all in this together (I need my ministerial car for 9.00)" government.

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Forum Editor

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morddwyd

Succinctly and beautifully put. I agree with every word.

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fourm member

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morddwyd

'It's not the big bad oil companies but our caring, sharing "we're all in this together (I need my ministerial car for 9.00)" government.'

Fuel duty and the VAT on fuel brings in about £30bn a year. The total net running cost for government was about £18bn. Cutting ministerial cars is hardly going to fund a decrease in fuel duty.

You'd need close to 20% savings in government costs to fund a 10% decrease in fuel duty and tax.

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oresome

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I reduce consumption by gentle acceleration and a lower top speed.

As most drivers pass me, I can only assume that either they aren't that concerned about the cost of fuel or time is of greater value.

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csqwared

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FE

"In 1998 you could buy a barrel of crude for around $12; the same barrel today would cost around $112."

Apparently the rate of inflation since 1998 is 43% which should make the $12 somewhere around $17 so where does the additional $95 come from. I assume that R&D, transportation costs, wages etc. have all increased somewhere in line with inflation so there's a significant gap somewhere.

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Forum Editor

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oresome

Quite probably a large number of those drivers aren't paying for the fuel they use.

One of my daughters has just ordered a new company car - a Mercedes A class. When I talked to her about fuel efficiency she gave me a blank look, and started discussing the colour and all the optional extras she was getting.

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namtas

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FE

what they don't say is what they base their perception on.

I base my perception on the fact that petrol retailers prices in areas or pockets appear to be locked together, look around, you find half a dozen separate brands where the price is consistent across all six, then along comes a major shopping chain to take one of them over and offering a few pence per ltr lower price, and by magical withing hours all drop to match. Also you find a band of prices consistent in a town but a few miles down the road in the next town a different consistent price structure. Sorry but to me it seems very much like price fixing if ever there was one

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fourm member

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namtas

A man went to the Job Centre and was asked what job he'd had.

'I was an independent petrol retailer but when a new supermarket opened I didn't cut my petrol prices because I didn't want people to think I was involved in price fixing.'

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Forum Editor

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csqwared

yes, all those costs have increased, but additionally, oil is getting harder to find, and when it is found it's often much harder (and therefore more expensive) to extract.

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Forum Editor

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namtas

Like fourm member, I can see from your last post that you don't have much idea about how competition works in a free market economy.

Just think for a moment about what you said, and you may realise that when the supermarket undercuts the independents one of two things must happen.

a) They maintain their prices, and lose business, or cease to trade altogether.

b) They try to compete by lowering prices, and hope that their regular customers will feel a degree of loyalty and recognise the gesture by continuing to stop and buy petrol from them.

Price fixing is illegal, and it's not that difficult to detect.

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