DTI seeks petrol price review

The Office of Fair Trading has been asked by the Government to look again at whether petrol price wars are driving independent garage owners out of business, in a wider investigation into predatory pricing allegations.

Nigel Griffiths, consumer affairs minister, has asked John Bridgeman, head of the Office of Fair Trading, to review the petrol market, which was transformed early last year when Esso, the market leader, cut its charges in its Price Watch campaign. "The OFT is looking at whether independent retailers are being squeezed out of the market by predatory pricing," said Mr Griffiths. Another controversial topic due for consideration by the Department and Trade and Industry was newspaper pricing.

Esso is said to have lost pounds 200m last year after launching Price Watch, which matches prices at the supermarkets. It brought an industry-wide bout of price cutting which cost British Petroleum pounds 80m. Last year a further 1,500 independent sites closed, leaving just 8,343 compared with more than 30,000 in the 1960s.

Mr Griffiths said he would wait for the OFT's advice before considering action. Measures to curb restrictive trade agreements were to be included in the competition bill, planned to come before Parliament by October.

News of the petrol price investigation was welcomed by independent retailers yesterday. James Frost, chairman of Save, the renamed Frost Group, with 614 sites, said he had been disappointed by the OFT's previous reluctance to intervene.