OFT no to diesel probe
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• Transport associations are urging the Office of Fair Trading to investigate the massive hike in diesel prices, following its decision last week to look into petrol increases.
But the OFT says it is not considering diesel because it is not in such a dominant situation as petrol, although it will consider the information sent by the associations.
The Freight Transport Association is warning hauliers not to buy bulk diesel in advance: "It is both premature and finandaily risky for hauliers to stock up, because there is no indication of fuel supplies getting difficult," says Richard Turner, technical services director.
Only 5% of oil production is affected by the embargo on Iraq and Kuwait, so that oil companies not affected by the crisis are capitalising, he adds. "l'he only reason prices are going up is because the market is nervous, not because there is a shortage," he says.
With dery accounting for 1020% of hauliers' costs, buying large stocks now, when prices are up, could be disastrous, says Turner.
The Road Haulage Association says only in the next few months will the true damage of dery increases be shown. None of its members has gone out of business as a result of increases.
Last week it estimated the price increases had increased hauliers' fuel costs an average 21.25% since 13 July — representing a 4.24% in overall operating costs.
Analyst Paul Huffelman of Oil Price Assessment says: "The situation is very finely balanced, but it is quite possible there will be another increase before prices go down."
The five major oil companies have no immediate plans to increase dery prices.