Fuel Price Fixing

The big bad fuel world always has and probably always will have a bad reputation and with breaking stories about accusations of swindling the general public with price fixing, it’s easy to see why.

The latest story to hit the press is concerning three major players within the fuel industry; BP, Royal Dutch Shell and Norway’s Statoil. These three firms are facing claims that they have been fixing oil prices for over a decade, purposely driving the prices up for consumers.

The investigation in to the fuel giant’s conduct is being carried out by the European Commission, working closely with the Office of Fair Trading. It is not yet known whether or not the allegations are true, however the EC says, “The Commission has concerns that the companies may have colluded in reporting distorted prices to a price reporting agency to manipulate prices for a number of oil and biofuel products.

“Furthermore, the Commission has concerns that the companies may have prevented others from participating in the price assessment process, with a view to distorting published prices.”

These allegations come only one year after the Office of Fair Trading carried out its own investigation in to price fixing within the petrol industry and found no cause for concern. Tory MP Robert Halfon, accused the OFT’s inquiry as being “limp-wristed and lettuce life”. Mr. Halfon is campaigning for cuts to fuel duty and greater transparency throughout the industry.

One positive outcome to arise from the fuel scandal is the “news that motorway service areas may be forced to advertise the price of fuel on roadside hoardings will at least go some way towards achieving fuel cost transparency,” said RHA chief executive Geoff Dunning.

“Currently, the price of fuel at MSAs is approximately 10 pence per litre higher than high street prices. The result of this new legislation, if it becomes reality, will be lower prices on the UK’s key routes and that has to be good news for everyone.”

In response to the allegations, Prime Minister David Cameron, has indicated that should the accused parties be found guilty of price fixing they will feel the ‘full force’ of the law.

The Labour party has stated that “if the EU investigation does uncover any wrongdoing, it will raise serious questions about the effectiveness of our own authorities.”

The report from the EU is planned to be published within the next couple of months and will outline how it best sees fit to ‘tighten up energy benchmarks’. Some of the abuses detailed within the report are thought to date back to over 10 years ago. Even small distortions with the can have a “huge impact on the prices of crude oil, refine oil products and biofuels purchases and sales, potentially harming final consumers”.

The investigation by the EU so soon after OFT stated that the competition within the market was “working well” leaves the U.K. authorities looking incompetent.

All three of the major fuel companies have confirmed that they are working with the authorities to assist with their enquires. The EC goes on to say “any such behaviour, if established, may amount to violations of European antitrust rules that prohibit cartels and restrictive business practices and abuses of a dominant market position.” Only time will tell.

If you manage a number of fleet cars, are concerned about high fuel prices and better want to manage your fuel spending, why not consider a fuel card from mffuelcards.co.uk. Cards such as this provide price notification options, e-billing and interest free credit.

Author Bio: Leah Jarratt is a regular guest writer for MF Fuel Cards, European Diesel Card.

Categories: Business

15 Comments

  • Golden says:

    They are in my price range, I am planning on selling my car now and getting one from the year it came out. How are maintance cost, etc.

  • Christen says:

    Has the check engine light on, had it read and they said it was a miss in the #2 cylinder. It still drives. Is this fixable? What do i need to do? Drive it until it blows and find another car? Or is it worth the price to fix?

  • Oscar says:

    I wish to make a complaint against a company that I had a contract with. Due to no fault of my own, I was unfairly hit with a number of financial penalties during my time with them. I have been advised to forward complaints to both of these, by different people. There is also a company that owes me money and once paid me with a cheque that bounced. I also wish to make a complaint against these. If someone could explain the fundamental differences in these two organisations, I would appreciate it.

  • Leo says:

    I just bought the car at a very low price with lots of miles on it. When we try to put it into reverse, it slips into neutral or won’t actually shift at all, would that be a clutch problem? We tried filling the gas tank the other day since it was practically empty but we were only able to get about 3 gallons in before gas spilled out. We checked the gas gauge and it was right at half, would that possibly mean the the gauge is off? Are these problems common?

  • Taryn says:

    If only the U.S. could switch to this form of fuel and start giving the Arabs the screwin!! But just like anything to good it will be shot down!

  • Miquel says:

    I have a 2004 Chevrolet z71 Avalanche and it worked normally but the fuel gauge got stuck and keeps moving around and messes up. How much would it cost to fix it?

    B Question: How much would it cost to repair the transmission of a 2004 Avalanche (z71)
    Please Help Thank You

  • Clayton says:

    K. Unemployment begins to diminish; income, output, and consumption rise; and prices gradually start to increase.

    L. Prices creep down as unused capacity develops.

    M. As unemployment begins to increase prices rise proportionately.

    N. Prices remain stable throughout the expansion phase.

  • Shawn says:

    Demand for oil will be elastic in the long run, since we will invent an alternative fuel. Will the middle east just be a wastleland when this happens?

  • Mitsue says:

    They investigate Baseball Steroid use, but not record OIL profits when there is a “shortage on oil” which is supposedly feeding the rise in fuel costs? Or was it the weather in the gulf? Or is Congress just being paid off?

    It’s not making sense they buy oil in bulk not per barrel which is cheaper so when prices go up it shouldnt have the impact that its having. Thoughts ideas behind this price fixing cartel called Shell, Exxon, Standard Oil?

  • Chester says:

    I don’t like the idea of a big wedding at all but we would like to get married this year or next. Would consider a wedding abroad but would also consider a registry office and dinner out somewhere child friendly but special.
    Have you been to any fab low cost weddings?

  • Edwin says:

    I feel they are talking about everything but the real issuse!! I want to hear 1. real answers and a plan to fix the high fuel prices in america 2. how they are going to fix the mess they made in Iraq.3.what are they going to do about global warming. and all without raising taxsor taking the money from my pocket to do it. whats your opinion?

  • Haywood says:

    In that advertisement, Govt of India compared the fuel prices in Sri Lanka, Pakistan, & Nepal, which are in comparison to India are under developed or say below India on every line, but conveniently “OMITTED” the names of developed or most developed countries who reduce the fuel prices as and when the international market slide down ???

    May I know your valuable comments on this aspect and on the advertisement by Govt of India????

  • Erika says:

    School is 4 miles away and no one can drop me off at school and bus is price is 1 75 there and back. The car has atleast 21 mpg. Can this save me money. If not how.

  • Jacquline says:

    Is it a good idea for me to fix my energy prices until 2012? I really wish I’d done it 6 months ago, my electricity bill is over £200 for this quarter! I just don’t want to be scared into fixing my tariff and then see fuel prices come down, leaving me stuck with these ridiculous charges.

  • Sharice says:

    I was wondering: if someone invented a artificial/ genetically modified bio fuel tree we’ll call it NEOFUEL. that takes less than a year to grow into a tree with lots of neofuel fruits.

    This fuel could power cars, power stations, homes whatever. It was 80% as powerful as regular diesel or petrol. Could this fix the economy of a country?

    This would be in addition to creating artificial soil. the idea is that you would dig a hole in the ground i a hot country, load it with this artificial soil and it would be just as fertile as regular farm soil.

    so lets say i went to Zimbabwe, Jamaica, Madagascar or another poor country (im african descent) and became leader (bare with me here) then i hired the local population to create artificial farms covering over one third of the countries land (in uninhabited areas of course) Then use this to grow biofuel. then from there i used it for power stations for homes create a local manufacturing industry to build neofuel cars, trucks and sewage system.

    Then afterwards use the money to fund roads, schools, opticians, universities doctors, food banks ?
    Also, use artificial farms to grow new food to feed the local populations at discounted rates etc? do you think this would work? do you think a biolfuel like this and a plan like this could potentially revolutionize the world as well as save third world countries from their bleakness?? thoughts??

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