Thursday, March 24, 2011

Petrol stations were accused of "ripping off" drivers by putting up the price of petrol hours before the Budget, only to lower the price with a fanfare once George Osborne announced a cut in duty.

Drivers around the country have complained that they have failed to benefit from the 1p cut in duty, with the price failing to drop at their local forecourt. Some have accused their local petrol station of cutting the price – but with a sleight of hand that hid the fact they had raised the price just hours earlier.

Clive Sinclair, a software developer near Glasgow, said that his three local garages – two Tesco forecourts and one Asda – all moved the price 130.9p a litre for unleaded on Monday this week to 131.9p on Tuesday, only to cut it back to 130.9p on Wednesday night. He said the price movements were evidence of "rip off Britain".

Tanya Barrow, a full-time mother in Hampshire, said the Shell in Fleet had diesel on Tuesday priced at 137p. On Wednesday morning, on the school run and four hours before Mr Osborne announced the cut, it was 138p. But by Wednesday night it was back down to 137p.

She said: "Fuel companies seem to have seen it as an opportunity to raise their prices and thereby increase their profits, before appearing to drop them again. It's sharp practice."

Those within the motoring industry said that many petrol stations would have been forced to have put up the price this week – with or without a Budget – because of the rising cost of wholesale petrol.

Unleaded petrol was 133.53p on average yesterday, 4.5p higher than a month ago. Diesel was an average of 140.26p, a rise of nearly 6p.

Luke Bosdet, an AA spokesman, said: “My view is there may be a few mavericks out there. But I don’t think there is evidence that there has been large scale fiddling.”

And there were warnings that many rural motorists would not benefit at all because independent petrol stations still had stocks of petrol, sitting in tanks beneath the forecourt, which had been bought at the higher pre-Budget price.

Brian Madderson, the chairman of the RMI Independent Petrol Retailers, said: "Rural motorists will have to wait longer. It seems that the chancellor and the Treasury are unaware that 6,000 independent retailers across the country buy their fuel on duty paid basis from the terminal.

“That means that old stocks off have to sold off before the duty reduction can come into force.

“About 2,000 stations are classified as rural. Their turnover of stock will take much longer than an urban location. These forecourts supply 98 per cent of the market in the countryside. In some cases it could be as long as a week before they get stock at the new lower rate of duty.

"Despite the chancellor’s optimism, the motorist may never see a reduction in price.”

In his Budget the chancellor scrapped the policy of raising fuel duty by inflation plus a penny each year.

Duty will still go up in line with inflation, but this April's inflation increase will be postponed until January next year, giving motorists a nine-month breathing space in addition to last night's one-off cut.

Without Mr Osborne's decision, petrol and diesel would have been 6p more expensive per litre from April.

It has been funded by a windfall tax on North Sea oil companies. Mr Osborne insisted these companies' higher costs would not filter down to the petrol pumps. He said: "We will be watching like a hawk to make sure that motorists get the benefit of the budget changes and make sure that there's no funny business."


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