Belfast Telegraph

Saturday 19 April 2014

Fury at fuel costs that vary according to where you live

Household spending on petrol, motor and diesel oil works out at nearly 25 pounds a week, up more than three pounds on 2010

Supermarkets have been told to stop rip-off fuel prices after a report revealed motorists here are paying more at the pumps than anywhere else in the UK.

Petrol in Northern Ireland costs 0.8p per litre more compared to the mainland, while diesel prices are 0.5p higher on average, the Office of Fair Trading found.

Yet local motorists are being hit by a postcode lottery with costs differing by up to 6p per litre across the country from the same retailer.

It means filling up a family car with a 70-litre tank could cost £4.20 more each time depending on where you live.

The Consumer Council examined fuel prices across Northern Ireland and found major variances.

Among the worst offenders was retail giant Sainsbury’s, with a 6p difference in a litre of petrol depending on where motorists filled up.

The Consumer Council’s chief executive Antoinette McKeown said the practice must end.

“The OFT report clearly indicates that large supermarkets can buy their fuel at a lower cost,” she said.

“We recognise that local pricing is not a competition issue but halting this practice and giving the best possible price to all Northern Ireland consumers would show that supermarket retailers are doing right by their customers.”

The highest petrol prices were recorded in Belfast, while consumers could get the best deal in January in Craigavon, the Consumer Council found.

Diesel proved slightly more expensive. The highest prices were charged in Londonderry, while the cheapest prices were found in Coleraine.

The Office of Fair Trading (OFT) said Northern Ireland is now the most expensive place for petrol and diesel across the UK.

It said one key reason is our lack of supermarkets. Big stores often charge lower prices and apply competitive pressure to rival retailers, but Northern Ireland suffers because there are fewer here.

While retail giants such as Tesco and Sainsbury’s account for 15% of filling stations in England, Scotland and Wales, in Northern Ireland it is just 7%.

Another factor is volume of sales. Local sites averaged 1.6million litres a year compared to 4.3m in other regions.

OFT said retailers in Northern Ireland “are more likely to be operating at low levels of volume that fail to exploit economies of scale”. It added: “This volume|difference alone could account for a 0.5p per litre difference in both diesel and petrol pump prices.”

OFT’s figures were based on research conducted in August.

Last night there were calls for the Government to step in and help end the misery for Northern Ireland motorists.

Ulster Unionist MLA Sandra Overend urged Westminster to take action. “I am calling on the Westminster government to look at giving exemptions on fuel duty to Northern Ireland in an attempt to alleviate the situation for already hard-pressed consumers and businesses,” she said.

Sinn Fein called for fuel duty powers to be transferred to Stormont, claiming it would open the possibility of lower prices.

Sinn Féin MLA Daithí McKay said transferring powers and adopting a policy in keeping with the local economy could save millions of pounds a year that could be put towards a fuel duty reduction.

“Transferring fuel duty powers to the Executive would bring the ability to vary the levy rather than have it imposed on us from Whitehall,” said Mr McKay.

“Some estimates put the initial cost of reducing fuel duty by one pence to be £17.5m.

“This makes it clear that if the Executive had powers to set fuel levies we could set the level at a competitive rate with that in the South and thereby eliminate the differential along the border and actually increase revenue.”

Mr McKay suggested it may assist in tackling fuel smuggling and laundering. OFT rejected claims that motorists are being ripped off.

It concluded that high prices across the UK are the fault of taxes and the cost of crude oil, adding competition in the sector was “working well”.

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