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Transport: Fuel Prices

Volume 732: debated on Thursday 24 November 2011


Asked By

To ask Her Majesty’s Government whether they plan to take action regarding the retail price of fuel at motorway service stations.

My Lords, the Government believe that the prices that an enterprise charges for its products and services is primarily a commercial matter for the enterprise concerned. Any competition concerns relating to the pricing of goods, including the retailing of petrol at motorway service stations, would fall to the Office of Fair Trading to investigate as the responsible competition authority.

My Lords, I am grateful for that Answer, but is the Minister aware that prices at motorway stations are currently at about 10p a litre above those available elsewhere? This surely cannot be right. Will the Government consider referring the matter to the Office of Fair Trading or, on the other hand, copying what is done in France, where on the approach to a service station there is a notice board indicating the supplier and the price not only at that station but at the following two, and in that way promote competition?

I am very interested in the second part of that question. That sounds a very good idea, and I shall take it away if I may. My answer to the first part, of course, has to be that the Government believe that the best guarantee of a good deal for consumers is an open and competitive market—so what he suggested at the end of the question would be very helpful. However, if there is a concern that petrol prices at motorway service stations are affected by anti-competitive practices, the responsibility falls back to the Office of Fair Trading, and the Government really cannot interfere with that.

Do those high prices reflect high rents being paid by petroleum companies for motorway sites to the Department of Transport?

In answer to the noble Lord’s question, we believe that the best guarantee of a good deal for consumers is an open and competitive market. I cannot answer it any more clearly than that.

My Lords, could my noble friend answer the question that the noble Lord just asked? Are the high prices, which the noble Lord, Lord Steel, outlined, in any way attributable to the franchise costs charged by government?

I do not have the answer for that directly. I will go back and get the result, but I have to repeat that the Office of Fair Trading would be very quick to see if there were difficulties on either side in this argument.

My Lords, will my noble friend tell us when the Office of Fair Trading last investigated motorway fuel prices? The office has spent huge sums of money and time investigating bus fares, but motorway service station prices affect far more people.

No, I do not know the answer to that question about the last time that it looked. All I know is that it will constantly be looking and if there is enough worry around the area it will, I am sure, look at it.

Will the noble Baroness confirm that the number of staff engaged by the Office of Fair Trading has been reduced?

I would imagine that everybody is tightening their belts. No doubt it, too, has had to reduce, as have all government departments following the terrible debts that we incurred when we came into government.

My Lords, given that the 10p excess which is often charged by motorway service stations is a very high fraction of the actual cost of the fuel, and that the companies are therefore getting a much greater return than elsewhere, should the Government not look at this matter as an issue of urgency?

As I think the noble Lord knows, the Government cannot intervene where the Office of Fair Trading should be acting.

My Lords, I have not checked it for quite a number of years, but is the noble Baroness aware that there is, or used to be, a website on which you could access the price of fuel that was closest and cheapest to motorway services?

That is a wonderful answer. Once again consumers, if they have the right amount of information, can make those choices.

My Lords, while the noble Baroness is looking at the possibility of displaying prices of fuel stations further down the motorway, will she also look at the possibility of allowing those who provide the fuel at motorway services to say on the notices outside the motorway station who they are? You can say where the coffee comes from, and who is providing that and other services, but you do not seem to be able to say who is providing the petrol.