Probe into Scottish Fuels’ wholesale prices 7/10/11
An independent probe is to take place into the extra high cost of fuel in the Western Isles.
Scottish Fuels which controls a virtual monopoly on fuel supplies in the islands voluntarily agreed to open up its confidential books to an impartial body in the aftermath of public outrage that islanders suffered the most expensive petrol in the UK.
Isles MP Angus Macneil said the firm agreed to the independent examination of its practices and complex supply chain. He suggested the Office of Fair Trading or a Scottish parliamentary panel could carry out the investigation.
The important concession came from Sam Chambers, managing director if GB Oils which owns Scottish Fuels, despite being earlier jeered as he struggle through a group of campaigners for a meeting with island parliamentarians today.
The meeting was organised by Western Isles MP Angus Macneil at a time when fuel is nearly £1 more expensive in the Hebrides compared to Inverness with many island motorists paying about £7 a gallon at the pumps.
Bus fares have gone up by 32% in the last three years and taxi charges have also risen recently due to the increased cost of fuel.
Around 50 people turned up at a demonstration to confront Mr Chambers on his way in Western Isles Council's HQ in Stornoway where the forum with island community representatives and politicians was being held.
Hecklers accused Mr Chambers of profiteering and exploiting his firm's virtual monopoly in the islands. They demanded fair fuel prices and wanted to know why the same coastal tanker takes on oil from the same refinery and delivers to Inverness and the islands on one voyage yet there is such a huge price rise by the time it gets to the islands.
Retailers say they only apply five or six pence to the wholesale cost per litre per turning the attention onto UK giant supplier GB Oils which operates Scottish Fuels as a division of its business.
The Treasury recently revealed it received European agreement for a 5p discount on each litre of fuel yet islanders would still pay more if rises in the wholesale price continue their present trend.
Mr Chambers declined to comment after the meeting but it emerged that giant oil refinery conglomerate Conoco plays a major role in the supply chain and only sells the fuel to Scottish Fuel when it is drawn down at the island oil depots and not when it leaves the refinery at Immingham. The variable wholesale price is determined on that particular day.
MP Angus Macneil highlighted that a vital breakthrough had been achieved in winning
an investigation though the complex Conoco set-
Angus MacNeil said: “Conoco Oil is a new dimension in this. This enables companies to hide behind one another and makes the situation less than transparent. It is not clear where the price differentials are going, although we do know what they retailers are making – who have generally been quite open.”
“It is an opaque situation and we have to get to the bottom of it.”
Alasdair Allan said: “Scottish Fuels at one point offered the explanation that island retailers were to blame for this, something which the meeting certainly did not accept.”
He said there are still many unanswered questions in a “community which is growing ever more anxious about the cost of fuel and we impressed upon Scottish Fuels that this is a subject which we are contacted on literally every day by constituents.”
“The Office of Fair Trading also recently responded to a letter from me in which they indicated that they are currently examining fuel prices in the islands to establish whether things have changed since they last examined complaints about a local monopoly in 2000/1.”