Dave Thompson MSP

Dave Thompson, SNP MSP for Skye, Lochaber and Badenoch, has today welcomed the announcement that the Office of Fair Trading (OFT) is to produce a report on the level of competition in the UK Fuel market. The OFT issued a call for information into petrol and diesel prices, and will report its findings in January 2013.

The report will focus on three issues; whether the reductions in the price of crude oil are being passed reflected in prices at the pump, whether supermarkets and major oil companies practices are distorting competition, and whether there is a lack of competition in rural communities. This report follows the OFT report on Petrol and Diesel Pricing in the Scottish Islands which was published in May 2012. This report concluded that there is a differential between island and mainland pump prices, that this differential has been widening and that wholesale and retail prices are higher in the islands than on the mainland.

Commenting on this, Dave Thompson said: “I’m glad that the OFT will be reviewing Fuel prices, and particularly glad that there will be a specific focus on the lack of competition in some of our rural communities. Remote communities do not have the same number of retailers and therefore can suffer from a lack of competition.

The OFT have published finding’s earlier this year which indicate that fuel prices are not only higher on the Scottish islands than on the mainland, but that the gap between the mainland and island price has been increasing. Very few of our communities are benefiting from the decreasing price of crude oil, so it is clear that these savings are not being passed on.

There is also concern that citizens in communities such as on Skye have not been seeing the benefits of the much lauded 5p reduction in fuel duty announced by Danny Alexander earlier this year. I hope that by revisiting the issue of fuel prices in island communities the OFT will be able to ensure that we see prices at the pump start to reflect the 5p reduction in fuel duty.

While the single biggest cause of the high prices our communities have to face at the pump is the disproportionate level of duty levied by the Chancellor, the highest in the EU, I nevertheless welcome this action by the OFT and hope that if there is evidence of a lack of competition in the fuel market action can be taken which will ultimately reduce the price of fuel at the pump.

Notes:

The May 2012 OFT report

The OFT’s call for evidence