An investigation by the Competition and Consumer Protection Commission (CCPC) of the retail fuel market has found minimal evidence of price gouging following the government’s cut to excise duty in March 2022.
The probe was initiated after the watchdog received over 200 complaints from motorists that some forecourts were pocketing the tax reduction instead of passing it through at the fuel pumps.
After requesting detailed pricing information from half of all service stations in the country, the CCPC’s conclusion is that following the excise duty cut the difference between pump price and the wholesale price generally remained within the normal range for the industry.
In a new report, the Commission’s verdict is that increased international prices were behind price increases for consumers in the period leading up to the excise cut rather than stations illegally coordinating their prices or a lack of competition.
CCPC chairman Jeremy Godfrey said the analysis shows that there was effective price competition between petrol stations in all counties.
In Association with
“However, pump prices did not immediately fall on the day the excise duty cut came into effect and it is understandable that consumers were concerned about this,” he added.
“Our analysis found the main reason was that it took time before petrol stations received supplies of fuel that had been taxed at the lower rate. The delay varied from station to station because of differences in stock levels and differences in the supply arrangements between petrol stations and their suppliers.
“Additionally, the pump price was affected by volatility in the underlying cost of fuel, which made it difficult to isolate the impact of the excise duty cut.”
The CCPC investigation encompassed seven of the main fuel companies operating in the retail motor fuel market about their company-operated service stations, as well as c.800 dealer-operated service stations.
The watchdog said it received information relating to 714 service stations, and carried out market surveillance on 277 service stations across 15 counties between 12 March and 4 April 2022.
The CCPC’s analysis shows that one-third of the service stations in Ireland are owned and operated by Circle K (13%), Applegreen (10%), Maxol (6%), Top Oil (3), DCC (3%), and Greenergy (1%).
The balance of fuel stations are owned and operated by small traders or independent brands, which account for 34% of retail sales volume.
In the March 2022 review period, the CCPC found that where sales were concentrated amongst one or two fuel companies in a particular location, those companies were the most competitively priced.
“This is consistent with a market where consumers can and do switch easily and where competitors with the lowest prices are rewarded with a significant share of volumes,” says the CCPC report.
“The combination of relatively low concentration levels, price transparency, and customers actively switching between stations indicates that the motor fuel market in Ireland does not exhibit characteristics that demonstrate significant or structural competition problems.”
