The fuel wholesale supply monopoly in the Western Isles has been broken as Highland Fuels moves in.
The Inverness-
The purchase has been approved by Office of Fair Trading (OFT) which stepped following the £42.5 million merger of two rivals, Scottish Fuels and Brogans.
Fears of fuel price rises were voiced by islanders when Scottish Oils parent firm GB Oils took over its only competitor in the Western Isles. The enlarged group would account for the entire supply of heating oils and transport fuels.
A fuel supply war between the two firms in the Western Isles had previously seen prices drop by around 10 pence per litre.
Scottish Fuels controls a dominant position in the islands’ oil supply network.
As a result Brogans' oil distribution business on the Western Isles will be sold to Highland Fuels Limited.
The OFT which insisted on an upfront buyer being identified in advance, examined the suitability of Highland Fuels as a purchaser of Brogans' oil distribution business.
It includes ensuring that Highland Fuels had been able to agree a new lease for Brogans' oil depot at Stornoway airport.
Sheldon Mills, OFT’s director of mergers, said: “This merger would have led to a virtual monopoly for the supply of heating oils and transport fuels in the Western Isles.
“ However, the sale package agreed today will restore pre-
“The OFT believes that Highland Fuels, with its extensive experience of providing this service elsewhere in Scotland, is a suitable purchaser for the divestment business.”
After arriving in the Western Isles two years ago Brogans forced Scottish Fuels to lower its prices after shipping road fuel tankers to Lewis and Harris twice weekly and taking advantage of the cheap ferry freight costs through the RET scheme.
It recently established a permanent supply of fuel by using three large storage tanks by an oil depot at Stornoway airport and also planned to challenge its rival in the Uists.
Brogan initially focused on supplying heating oil as well as red and white diesel to the islands. It also did a roaring trade in marine gas for fishing boats.
Highland Fuels breaks islands’ fuel monopoly 30/6/10