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AA calls for inquiry over cost of diesel

Motoring organisations around Europe call for investigation into market manipulation as diesel costs reach record levels

Motoring organisations around Europe are to step up their campaign for an investigation by Brussels into market manipulation by financial speculators and energy companies as the cost of diesel at Britain’s pumps nears record levels.

The AA said it would meet its counterparts on the continent early next month to find a way of easing the burden of rising fuel costs on hard-pressed consumers.

“There is a lack of transparency in the fuel market, which is of major concern to all of us. We are anxious to understand how the price of European petrol can be ,200 per metric tonne in 2008 and again in 2011 and yet oil prices are 10% to 15% cheaper,” said a spokesman for the British motoring group.

Figures released on Thursday showed the price of diesel on the forecourts was 142.07p – less than 1p below its highest-ever average level of 143.04p – at a time when crude oil prices have plunged from 7 a barrel in 2008 to 3 in April last year and now to 1.

Rising fuel costs are bad for the wider economy, driving up the price of food and other commodities.

Growing public anger over petrol prices is likely to increase the week after next when Shell, one of the biggest petrol suppliers in the UK, will announce fourth-quarter profits of nearly bn (£3.2bn).

Large oil companies argue that they earn little profit from forecourt sales and make the vast bulk of their money out of “upstream” oil production. They point out that most of the petrol price is tax.

The AA says it is difficult to know whether it is oil companies, refiners or investment banks and other financial speculators that are to blame for the disparity in different energy prices and their relation to supply and demand.

“This is why we need the European commission to investigate,” said the AA spokesman. “It is unclear – and yet in the US, Australia and south-east Asia there is published information on all this that makes it easier to see what is happening. Is it the middlemen who are doing the damage here? We have no way of proving it.”

Both Shell and BP have sold off their key refineries in Britain but new owners such an Ineos and Petroplus have had financial problems, with the latter currently running its Coryton refinery in Essex at half capacity to save cash.

Meanwhile, motorists are facing further cost increases, with the AA warning that the average annual comprehensive insurance premium stands at £971.40 – up 5.4% on October and 15.3% on last year.

The rising cost of motoring will put more pressure on the government to delay further tax rises on petrol and diesel. Quentin Willson, a former Top Gear presenter and a leading light in the FairFuelUK campaign group, said in a blog: “The battle for affordable fuel has only just begun and FairFuel is the only gladiator in town. George Osborne wants another duty rise later this year. I’m determined that’s not going to happen.” © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds