It's a rip-off

LOCAL petrol retailers have been ripping off motorists by as much as 30%. An independent report said that garage owners are making an average of 18p a litre on petrol sales and 17p on diesel, compared to 7p in Jersey and less than 5p in the UK.

And retailers have been warned by Commerce and Employment that any attempt to add a margin to duty increases due in January, when motor tax is transferred to fuel, will be stamped on.

'I have no problem with people saying they want to make a margin on the product, but if they put that margin on the duty when it hasn't increased their operating costs, well they shouldn't be adding a margin to a tax,' said minister Stuart Falla.

He wants to work with the public to put pressure on retailers to push the prices down rather than use

legislation.

A similar report in Jersey, completed two years ago, has inspired competition and dropped pump prices by about 10p at a time when petrol costs have been rising. Margins had gone down from 18p to 11p. Only one garage has closed in that time.

The department is hoping that the report, which is out to consultation in the industry, will push retailers into self-regulation or agree a code of practice and see prices fall.

The report concludes that petrol costs nearly 4p more than it would in the UK to reach the island and be distributed. The three importers and suppliers have effectively been cleared of over-pricing.

But when it reaches the garages the costs really start to mount.

Late last year, before fuel duty was nearly doubled to 13p a litre, petrol cost an average of 52.3p, compared to 71.9p in Jersey and 87.9p in the UK.

The Guernsey net price was higher than the others and, using an industry formula, extra Guernsey cost factors have been calculated at nearly 6p a litre.

But margins add up to a third on the pump price, compared to a minimum of 10% in Jersey and 6% in the UK.

Deputy Falla and his department have backed the report's findings.

'If we take a kicking over this, what the States will be saying is that they don't put consumers in the forefront of their minds,' he said.

Guernsey Motor Trades Association chairman Dave Beausire today said that the report's findings would close forecourts.

Small operators were already making a loss on fuel, he said.

'This will drive the final nail into the coffin of the small independent businesses and create a monopoly marketplace if the States implement the recommendations,' he said.