22nd January 2003

UK PRE-TAX UNLEADED PETROL PRICE CONFIRMED AS THE LOWEST AMONGST MAJOR EU COUNTRIES IN 2002

The average pump price of unleaded 95 octane petrol, excluding duty and VAT, on Britain’s forecourts was the lowest amongst major EU countries during 2002.

Data from OPAL Oil Price Assessments Ltd, one of Europe's leading energy information companies specialising in downstream oil markets, was based on the monitoring of major brand pump prices across 10 EU members countries. It revealed that the UK average pre-tax pump price of unleaded 95 petrol was a full 1 penny per litre cheaper at 16.6 pence per litre than the next lowest countries, France and Germany on 17.7ppl.

The UK was also second cheapest pre-tax for diesel averaging18.3ppl, compared with 17.9ppl in Germany and 18.4ppl in France.

Malcolm Webb, Director General of UKPIA, commented “This data from OPAL underlines just how competitive fuel retailing is in the UK. Pre-tax pump prices have been consistently amongst the lowest in the EU over the last six years. At the same time, our members have introduced cleaner low sulphur fuels well ahead of the EU mandated deadlines, which combined with new engine and exhaust clean-up technologies, have made a significant contribution to reduced exhaust emissions”.

Competition in fuel retailing is also reflected in the level of gross margin on each litre of petrol sold – the difference between the selling price of petrol and the open market cost – which, OPAL figures show, averaged just over 4 pence per litre in 2002.

This compared with close to 7 pence in 1992. The gross margin is not the profit available to a retailer but represents the sum available to cover costs such as transporting fuel from a refinery, marketing and promotion, and operating a filling station.

These tough conditions have contributed to the closure of filling stations in both urban and rural areas of the UK, whose number has declined from over 18,500 in 1992 to 12,200 in 2001.(Source: IP UK Retail  Marketing Survey 2002).