Scottish Fuels answers criticism

Gordon Diesel's garage's stunning fuel prices. SGD24432.
Gordon Diesel's garage's stunning fuel prices. SGD24432.

Following claims about the company in a letter written to the Gazette, Scottish Fuels have defended their practice of fuel delivery to the islands.

Gordon Maclennan, who reduced fuel prices at his Back filling station recently wrote: “I think everyone deserves an explanation of the events that led up to the 9 pence reduction in the fuel prices at the Back Filling station recently.

“We were under contract to Scottish Fuels for five years as are most filling stations on the islands and beyond. This forbids the filling station concerned from buying fuel (even if it’s cheaper) from a rival supplier.

“In fact there is an agreement in place between wholesalers that one won’t sell to any filling station that is in a contract with a rival wholesaler. We know this because we bought a single cheaper load of Highland Fuels last February that prompted Scottish Fuels to get in touch with them to cease any further supply to us as we were in an alleged contract with them. At that time in February we had to return to buying the price inflated fuel from Scottish Fuels.

“However we have been chipping away at them ever since about the content of this alleged agreement and lo and behold on the 10th September 2012 they clearly breached the terms of their own alleged agreement. (Details confidential at this stage)

“This breach of contract was heaven sent for us as we were now in a position to claim their contract void and we were as a result able to buy fuel at the cheapest price (spot price) and pass the savings on to the public.

“Once we were confident of the breach of contract we phoned Highland Fuels and asked for a price and a delivery on that day. To our astonishment they could supply us with fuel 8 pence a litre cheaper than Scottish Fuels were doing.

“If you take the 8 pence reduction in cost price and add to it the VAT on the reduced amount then we were able to reduce the price by 9 pence a litre. Scottish Fuels is on record as claiming to the OFT that they only make 2.4 pence per litre in the islands. Now ask yourself this question. How can Highland Fuels sell it to us 8 pence a litre cheaper than Scottish Fuels?”

In reply Scottish Fuels have issued this statement: “Scottish Fuels does not control the retail price of fuel; the price at pump is set by the retailers.

“Scottish Fuels has a mixture of retail sites either on a contracted basis or non-contracted basis; for those on a contract this is always by mutual agreement as to conditions and length.

“The company would also like to reiterate that the OFT carried out a full and thorough investigation of the business over the last five years, which concluded that margins have not changed materially over that period.

“Scottish Fuels continues to have dialogue with the Islands’ Parliamentarians regarding pricing on the Islands.”