Britain's local bus sector is going to face probe as the Office of Fair Trading has proposed to refer the sector to the Competition Commission, saying limited competition has led to higher fares for passengers.

OFT took the current step after a 5-month inquisition into the £3.6 billion industry.

According to the OFT, facts from the study showed that some practices of the local bus services could affect the competition in the sector adversely.

John Fingleton, Chief of OFT said, "Our investigation has unearthed a range of evidence that suggests the market for local bus services is often not working as well as it should and may be resulting in higher prices for bus users."

The bus sector can register its comments by Oct. 15.

It may be noted here that competition is also low as majority of local routes are operated by a small number of large bus companies.

Higher fares are charged in areas where bus operators are challenged by strong rivals.

OFT also said local bus sector is a market that enjoys an estimated £1.2 billion comes via public subsidy.