MP furious at OFT as it refuses to investigate isles’ high fuel prices

By NEIL RIDDELL

ANOTHER attempt to tackle the premium of between 15 and 20 pence a litre paid by Shetland residents at the petrol pumps fell on deaf ears this week as the Office of Fair Trading (OFT) refused to even look into the matter.

Northern Isles MP Alistair Carmichael, who has been calling for the issue to be addressed for months, met officials from the OFT on Tuesday but described their refusal to consider an investigation as “exceptionally frustrating”.

The OFT has previously stated that “market costs” must be to blame for the premium paid by islanders over and above the average cost on the UK mainland, in spite of concerns that GB Oils is abusing its monopoly position as the isles’ sole fuel supplier, and this week they told Mr Carmichael that the issue did not fit into their principles of “prioritisation”.

“To say that I am disappointed with the lack of willingness in the OFT to engage with this issue would be a complete understatement,” he said. “To put it another way, they will not assist people in Orkney and Shetland because there are not enough people to interest them and in any event we live too far away from London to be dealt with easily.

“I made it clear to the officials that this issue is not just going to go away and I have already sought a meeting with the OFT chief executive to discuss with him why his principles of ‘prioritisation’ are not sufficient to allow them to carry out their statutory duties in the Northern Isles.

“Our priority for the new year must be to impress on the OFT the strength of feeling that exists in the Northern Isles on this issue and I shall be seeking to involve the widest possible range of local people and organisations in that effort.”

The setback comes only a fortnight after treasury official Angela Eagle claimed the UK government could not consider a fuel duty rebate for those living in remote island communities because of the possibility that motorists would drive to such areas to stock up on cheaper fuel.

Miss Eagle claimed that the government had looked in great detail at the possibility but ignored the fact that the isles are reachable by car only through an expensive 12 or 14-hour ferry journey. She said differential duty rates could create “perverse incentives” for motorists, distort the fuel market and result in an increase in carbon dioxide emissions.

Mr Carmichael described the problem as the “single most crippling disadvantage” that bus­inesses and individuals in the isles are faced with. He said he was “not taking no for an answer” and will work with other MPs who are similarly affected, while ways of directly involving the community in trying to exact change may also be considered.

An OFT spokeswoman said: “The OFT takes seriously all complaints it receives, including those concerning the price of fuel in remote areas. The OFT can only open an investigation under the Competition Act if it has reasonable grounds to suspect an infringement of the act. From previous studies and continued monitoring of the market, the OFT has generally found that factors such as higher costs and lower sales per outlet [tend] to be important reasons for higher fuel prices in remote areas.”

Meanwhile, a rapid decline in global oil prices in recent weeks has seen the price of petrol at the pumps in Shetland plummet from a summer high of 133.9p a litre to 102.9p a litre at filling stations in Lerwick this week, meaning the differential from mainland prices is – temporarily at least – slightly lower than it has been for some time. According to petrolprices.

com, the UK average as of Tuesday this week was 89.3p a litre, though garages in some areas are selling for as low as 85.9p a litre.

The company responsible for transporting fuel to Shetland by tanker, GB Oils, has repeatedly refused to discuss the reasons for the price disparity between Shetland and the mainland publicly, but you can contact managing director Gareth Williams and chief executive Sam Chambers at the following email addresses: gareth.williams@gb-oils.co.uk and sam.chambers@gb-oils.co.uk