Scottish Fuels questioned on islands’ high fuel costs

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WESTERN Isles politicians today (Friday, October 7) met with Scottish Fuels to discuss soaring island fuel prices – as the Office of Fair Trading indicate they will investigate ‘the opaque world of fuel distribution’.

Seeking a response to the questions of why island fuel prices are so high in comparison to the costs paid by mainland customers, MP Angus MacNeil and MSP Alasdair Allan met with chairman of GB Oils, Sam Chambers, to present the parent company an opportunity to explain the high fuel costs.

After the meeting, Mr MacNeil commented: “We need greater transparency that there currently is over fuel prices locally. Scottish Fuels admitted that a lack of competition could be impacting on the price of fuel in the Hebrides.

This is one of the most opaque issues to affect the islands and one of the most important that Alasdair Allan and myself have had to deal with.

“A huge kingpin in all this is Conoco Oil, who own the fuel from their refinery on the Humber, and still own it while it is being transported by Scottish Fuels and while it is being sold by Scottish Fuels and who vary the price until Scottish Fuels distribute it,” he explained.

“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 the retailers are making – who have generally been quite open.

“I believe that a parliamentary committee or the Office of Fair Trading should now look at the opaque world of fuel distribution by Conoco and GB Oils in the Hebrides.”

The Western Isles Member of Scottish Parliament, 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.

“Less easy to untangle was the relationship between Scottish Fuels and their suppliers Conoco. Scottish Fuels have agreed to meet us all again to discuss this further, and in particular, to provide some information on the contracts between the two companies as this relates to the cost of fuel in the islands.”

He went on: “Today’s meeting, while helpful, still leaves many questions unanswered 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.”

Dr Allan expanded that he had no received a reply from the Office of Fair Trading who have indicated that they are currently examining fuel prices in the islands in a bid to establish any changes which may have occurred since they last investigated complaints about local monopoly in 2000/1.

He added: “Angus MacNeil and myself will pursue this further and it may be that an independent body will have to assess the explanation on offer from the company.”