Alternative fuel supplies a possibility for isles as NorthLink begins talks

A UK oil company has held preliminary talks with ferry operator NorthLink about the possibility of bringing petrol and diesel into the isles on their freight vessels – a move which could ultimately lead to reduced prices at the pumps for motorists in Shetland.

NorthLink’s chief executive Bill Davidson told a meeting of Wednesday’s external transport forum that the firm, which he did not name, has indicated that it is interested in such a move.

If the talks bear fruit it could put an end to GB Oils’ monopoly on supplying petrol and diesel to stations in Shetland. It may also eradicate a situation where motorists here generally pay up to 15 pence a litre extra to fuel their vehicles.

Prices in the Northern Isles are already among the highest in Britain, with a litre of unleaded petrol costing 130.9 pence and a litre of diesel 132.9 pence this week, around 10 pence higher than the average UK mainland price.

Speaking after the meeting, Mr Davidson told The Shetland Times: “At the last meeting we had there was a lot of discussion about the cost of fuel in Shetland, be it the cost of petrol, diesel or aviation fuel as Loganair was talking about the price premium they had to pay compared to Glasgow.”

He had been holding discussions with a UK-based oil firm about supplying fuel to NorthLink’s ships. The issue of petrol and diesel for motorists cropped up and the firm has passed the opportunity on to another firm.

Mr Davidson said: “I spoke to the MD of that company earlier this week and he has indicated that he is interested. He is going to come back to me in the next couple of weeks to see whether he can explore it further. The idea would be that we would bring it in [using] conventional petrol tanks. It’s an alternative way of bringing fuel into Shetland rather than the coastal tankers.”

From NorthLink’s perspective, Mr Davidson added, it would be more freight traffic which would provide revenue to keep the level of government subsidy down and help the company to reduce the level of cutbacks it will have to make.

Re-elected Orkney and Shetland MP Alistair Carmichael managed to extract a promise from the outgoing Labour government that it would look into the practicalities of a system allowing remote islands and rural areas to pay a lower rate of duty on petrol and diesel.

It is not clear what the approach of the new Conservative/Liberal Democrat coalition government will be, but Mr Carmichael said he was already lobbying ministers to see what can be done to improve the situation.