Fresh demands for investigation as diesel rises above £1.50 a litre

Renewed calls have been made for Shetland’s sole fuel supplier to be investigated after the latest three pence price hike pushed diesel beyond the £1.50 mark.

Lib-Dem election candidate Tavish Scott wants the Office of Fair Trading to look into GB Oils over the possibility it could be abusing its monopoly position.

Today he met the council’s political leader Josie Simpson in the hope an alternative way of getting fuel to the isles can be found.

Speaking afterwards Mr Simpson declined to give any details of the meeting’s outcome, but said he was determined action should be taken over the ongoing high cost of fuel.

“We have to try and investigate every avenue we can because it’s a serious situation,” he said.

Global oil prices rose again this week amid continuing uncertainty in the Middle East. Yesterday Brent crude was trading at $122.57 a barrel.

But motorists here are paying around a 20p premium for a litre of fuel compared with their mainland counterparts. This week’s rise brings diesel to around £1.52.9 a litre in Lerwick, with unleaded now standing at £1.47.9, even after the 1p cut in fuel duty in the budget.

Mr Scott said drivers were being forced to bear the brunt of a monopoly situation.

“The rise has been caused by the distribution company which owns the petrol pumps. It’s scandalous that all they ever do is put prices up,” he said.

“If ever there was a time that justified a need for the Office of Fair Trading to investigate why people are being ripped off, it is now. It’s time the council investigates every other way of getting fuel to the islands.

“There is a monopoly situation on the distribution of fuel, and in no way can the differential between Shetland and Aberdeen be justified.”

Mr Scott’s calls follow similar attempts earlier this year by his Westminster colleague Alistair Carmichael, who in February asked constituents to supply information which could form part of a submission to the OFT over concerns about the domestic fuel market.

Other election hopefuls have also called for action to be taken over the way petrol and diesel are sold to the isles. There is also concern over January’s 2.5 per cent VAT hike.

Independent candidate Billy Fox said rival bidders needed to be given the opportunity to supply fuel for Shetland.

“We need to look at introducing a competitive market to Shetland and introducing a second supplier – hopefully a supplier more in tune with the islands’ needs rather than pitching purely on a commercial basis,” he said.

“We need to investigate why we have such disparity between island and mainland prices – approximately 15p a litre. It does not cost 15p a litre to ship fuel to Shetland. This needs to be addressed.”

Mr Fox criticised chancellor George Osborne’s decision to levy a windfall tax on North Sea oil companies as part of the budget.

He dismissed claims the latest fuel hike would leave oil firms better able to afford the tax.

“You can’t put tax regimes in place and then arbitrarily change them. From a business point of view that’s irresponsible.

“It’s completely irresponsible to slap a windfall tax on the oil industry. [Chief secretary to the Treasury] Danny Alexander bragged about it, which was not an astute thing for him to do. They can’t defend it.

“It’s a £10 billion tax grab. But there’s a potential £50 billion investment at risk because of that. It’s really bad business thinking.”

Conservative candidate Sandy Cross said other sources of supply might appear on the scene if the SIC lead the way.

“Given the council is a large buyer of fuel it might be worth them looking for alternative sources of supply for their own use, in the hope that will encourage other sources of supply to come in,” he said.

“Anything that can mitigate against the scale of the increase, and any further increase, must be a good thing.”

Labour candidate Jamie Kerr said fuel was going to be a major issue for the election. But he stopped short of calling for action over GB Oils, insisting a reduction in VAT should be the first step.

“Fuel is going to be the issue of this campaign. What’s needed is a complete review of how island communities like Shetland are supplied with fuel, and what can be done to reduce the price of fuel,” he said.

“The starting point is the VAT increase. It’s clear the government haven’t done anything to help. There are things they can do.

“There’s talk about making an application to the EU, but at the same time they are putting more on the cost of fuel in terms of the VAT increase. They should reverse the VAT increase. That should be the first step.”

He said more consultation with the oil industry should have taken place before the windfall tax was implemented.

“People who can afford to pay should pay, but my issue with the oil tax was it came out of the blue overnight without any consultation, and it jeopardises jobs in the industry.”

SNP candidate Jean Urquhart said fuel prices had a knock-on effect on other commodities as well.

“The cost of everything is where we are going to feel it, from ambulances to deliveries of food, clothing, fish food and oil itself.

“This is probably the biggest and most serious issue, and I’m not confident we’re not going to see a £2 litre. We have got to let every organisation that is in any way connected with competitive tendering or pricing to investigate this issue. That is what I would expect my MP, my MEP or my MSP to be doing.

“The argument that has to be made is that until Scots have control of the industry in this country we’ll never be in control of the price of fuel.”

Calls to GB Oils from The Shetland Times today were not returned.