There are reports today that the Prime Minister has instructed his policy unit to look into ensuring that motorists receive more information on fuel prices at motorway service stations. The suggestion is that motorway signs will, in future, list the prices at the nearest station, and perhaps its nearest competitors; something which is a standard feature of the signage along French autoroutes.
This is just part of a political response to a whole range of “cost of living issues” that, unsurprisingly, loom large for a good many voters in the current economic climate – and extend to other areas, such as domestic fuel use and the price of supermarket food. This particular measure, though, springs from the Office of Fair Trading’s report in January, and by the Government’s announcement on March 20 that it intended to work with motorway service areas to address the points it raised.
Given that motorway prices can often be as much as 10p a litre, or about 5 per cent, more expensive than other retailers (especially those at supermarkets), this may come as a relief to drivers. Whether it will encourage competition, and so drive down the more extortionate charges, however, rather depends on the number of service stations on any given stretch of motorway. That in turn is determined by planning regulations, amongst other factors.
It’s worth bearing in mind that although the OFT singled out motorway retailers as a particular problem, the primary conclusion of its report was that, in general, British fuel prices were amongst the cheapest in Europe. If that seems hard to believe, the important qualifying phrase in that judgment was “pre-tax”.
More information for customers is surely a step in the right direction. But the main consideration for fuel prices remains the level of tax imposed by Government, which is surely why the Chancellor has frozen the duty escalator for the past two years. Even so, his increases in VAT still put up the percentage of every litre taken by the Exchequer to 60 per cent – which is about 83p of a pump price of £1.38. Unless George Osborne can afford to tackle that, there may be some distance to go to a cheaper tankful of petrol, no matter what signals the Government is keen to send out.
