12th December 2017

Trousering the loot? (Colin Hunter)

I see those nice Irish gentlemen, who are our monopoly fuel suppliers, appear to be up to their old tricks again.

When we were south on holiday in the summer time, the difference between a litre of fuel in Lerwick and Aberdeen was well under 5p.

But today, the price of diesel, which has been inexorably creeping up over the past few weeks, has increased to £1.30.9, at their own filling station in Lerwick, while the price in Aberdeen has remained reasonably static, at £1.16.9 at Sainsbury’s, £1.17.7 at Morrisons, and Asda in Portlethen, and £1.20.9 at the BP station at North Esplanade West.

This now makes it at least 10p a litre (or 15p including the 5p duty derogation) dearer than BP in Aberdeen, meaning that for a 50-litre tankful you will be £5 out of pocket at the pumps. This increases to almost 20p including the derogation if you use supermarket fuel. Or about 90p a gallon!

By their own admission the cost of transporting fuel to Shetland by sea is about 2.9p, meaning that the price in Lerwick should be equal to the price in Grangemouth, plus 2.9p, where, if we do another search on www.petrolprices.com we find the price is about the same as Aberdeen, give or take a penny or so, so apparently it costs nothing to transport it to Aberdeen!

Do they need that wee bit “extra” at this time of year to buy Christmas presents, and a few drams for the New Year, or are they just trousering the loot, hoping we wouldn’t notice, given that our heads clearly zip up the back?

I await an explanation in due course.

Colin Hunter
Rockside,
Skellister,
South Nesting.

6 comments

  1. John Tulloch

    If you want something worse than a publicly-owned monopoly, install a private one.

    If the powers-that-be in Shetland had any wit, they would be insisting that the proposed (rejected by Ofgem) gas-fired power station at Rova Head – supplied from Shetland Gas Plant – should go ahead, enabling low cost gas supplies for Lerwick (district heating or direct) and places along the way, e.g. Brae, to be installed.

    A further possibility would be a small LPG plant to supply vehicle fuel and enable places remote from the gas pipeline to also receive low cost supplies.

    That would provide much-needed competition, a profitable venture for SCT to invest in that would actually benefit Shetlanders and a reduction in Shetland’s “carbon footprint”.

    Sounds like, “Win-win-an’-better-win”?

    Reply
    • David Spence

      John, wasn’t something like this proposed quite a few years back? This being using the gas which is burned off at the flare-stack at Sullom Voe to be used for providing electricity at the power station here in Lerwick?

      I may be wrong, but the ‘ get out clause ‘ for the Hydro Electric was ‘ Could Sullom Voe guarantee 100% supply of the gas/fuel? and of course, no business can give 100%……hence the Hydro Electric pulling out of the deal……..so to speak. I suspect in real terms, it would have meant less profits?

      However, fast forward 40 odd years, and what is SSE proposing, I believe? What was suggested away back then?

      Is such a scheme possible? Would SSE make a profit from this new deal? Of course they will………They get a cheap source of energy to drive their new power station turbines whilst the people of Shetland pay for this by their bills going up……….a win, win situation for SSE?

      Alternatively, close the power station here in Lerwick and spend a fortune on a cable from mainland Scotland to Shetland? Which would work out cheaper and bring the largest profit?

      Reply
    • Colin Hunter

      I seem to recall that one of the things that was “promised” to Shetland in the ’70s during the planning stage of Sullom Voe Oil Terminal was that mains gas would be made available to at least the largest settlements, such as Lerwick and Scalloway with places such as Brae & Voe benifitting as well as the pipeline would have come through them.
      Almost 50 years on and we’re still waiting!
      Also the attempt to get people to convert their cars to LPG some years ago failed dismally because the gas was so expensive as it had to be shipped up from the mainland. This despite the fact that Sullom Voe terminal was only some 6 miles from Brae where the gas was about twice the price per litre as it was on the mainland.
      There never was any facility at the terminal for filling road tankers with LPG which would have made the supply of bulk gas to households and vehicles very competetive indeed, even though LPG was one of the things that was exported by ship in large quantities.
      Home heating oil and even petrol & diesel could also have been supplied locally, and still could, with the right infrastructure. I’m sure it would have paid for itself many time over by now had it been included at the time the treminal was built.

      Reply
      • John Tulloch

        Absolutely, Colin.

        There’s no excuse this time because gas and electricity utility SSE owns 20 percent of Shetland Gas Plant and the Laggan-Tormore gas field that supplies it – purchased specifically to secure its customers energy supplies and supply its own gas power stations.

        Speaking at the time, SSE chief executive Alistair Phillips-Davies said:

        ”The acquisition, including the Shetland Gas Plant …… gives access to gas …….to help
        secure energy for customers and to help meet the needs of our gas-fired power stations”.

        And where better to do that than where the gas first comes ashore? 

Why on earth do we transport gas south, only to bring it back as LPG in canisters?

      • John Tulloch

        How about this for irony?

        £97 million contract for gas-powered ferries (to reduce carbon dioxide emissions) for Clyde & Hebridean routes – doubtless, to be fuelled by gas from Shetland Gas Plant?
        http://www.bbc.co.uk/news/uk-scotland-glasgow-west-42070163

  2. John Tulloch

    David,

    Over 40% of Shetland’s current electricity consumption comes from Sullom Voe Terminal (SVT).

    I was one of the (then) Scottish Hydro-Electric team that negotiated, designed and implemented the original connection to SVT power station, back in the 1990s.

    That arrangement is apparently coming to an end due to SVT’s reported intention to pump their gas back offshore to enhance production from depleting wells.

    The suggestion I made above has nothing to do with SVT. It refers to Total/SSE’s Shetland Gas Plant which handles gas from the Laggan-Tormore gas field and could supply low cost gas for the purposes described, for decades to come.

    If heating oil costs around 6p/kWh and equivalent gas costs about 1.5p/kWh, that leaves a lot of financial scope for installing pipework to accessible places, etc. and in Lerwick the district heating scheme (currently 6p/kWh) is sitting ready made, with an impending fuel crisis due to incoming recycling regulations.

    Reply

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