I’m fascinated to see fuel prices attracting headlines again. Its almost exactly a year since I wrote about about the impact of ‘paper markets’ on fuel prices. At last the European Commission (EC) has decided that the evidence on fuel price manipulation is worthy of more serious investigation.
The front page headline in the ‘Daily Mail’ on 17 May 2013 summed up the mood – “Petrol Sharks Pile On Agony For Drivers”.
However, the casual reader might be confused as to where the real problem lies. The finger of suspicion is pointed at the oil companies, but mention is also made of traders such as Glencore, Cargill, Gunvor and Trafigura. There are accusations of stockpiling and market manipulation. Apparently investigators from the EC have recently ‘raided’ the London offices of BP, Shell and Statoil.
Setting aside all of this speculation and the usual ‘blame game’ so beloved of our media, the market is clearly not operating effectively. The main losers seem to be consumers, both businesses and households. The impact of over-priced fuel on our struggling economy must be huge, and this should be a high priority for the government. Of course, the implications of artifically high petrol and diesel prices for transport operators and planners are highly significant.
It is encouraging to see that, on 16 May, Terry Macalister of The Guardian reported that the Serious Fraud Office was considering a criminal inquiry into price fixing at various oil companies. However, I strongly suspect that the problem is a wider one.