Taken to the cleaners (Colin Hunter)

I was away “sooth” on a bit of a break a couple of weeks ago, and during that time I had the opportunity to fill the car on several occasions. One such time was at the station on East Marketgait in Dundee where unleaded was £1.30.9 and diesel was £1.34.9 that day. The same day I received an email from www.petrolprices.com informing me that the price of diesel in Brae was £1.46.9, as it still was yesterday when I filled up there.

Bearing in mind that we now “enjoy” a 5p duty derogation thanks to HM government, that makes a price difference of 17p a litre. Now, before we were granted the duty derogation, the difference was between 13 and 14 pence a litre.

Is it not strange that, within not many months of being introduced, the benefit to the consumer of the duty derogation seems to have shrunk as the price difference, cunningly masked by many upward and downward price perambulations not seen on the mainland, has crept ever upward.

Now, that nice Mr Chambers of GB Oils once went on record and told us that the cost of transporting fuel to Shetland was 2.7p a litre. This leaves 14.3p (or 65p a gallon) more or less unaccounted for. Mr Chambers told us that this was because of the cost of running the depot at the North Ness, maintenance of the tanker fleet and drivers wages etc etc., and that the remainder was down to the individual retailers.

OK! Fair comment, but are there no such depots down south, or tanker fleets to maintain, and drivers to pay? And do the retailers there not take a bit of a cut too? It would be naive to assume that the fuel from Grangemouth arrives in Dundee as if by magic and the journey costs nothing! A distance of almost 70 miles by road. Oddly enough another 70 miles or so to Aberdeen adds only another penny! Both distances are almost as far as you can drive in Shetland before falling off the end!

I don’t imagine for one minute that the fuel is transported by road tanker all the way though. That would be more expensive, and with Dundee and Aberdeen being seaports, it is not unreasonable to assume that the same, or similar, vessel is used to transport the fuel more cheaply to a depot on the dockside in those places. Perhaps adding a penny or so in Dundee and maybe 1.5p to Aberdeen. There is also a small refinery in Dundee which also supplies fuels into the marine and retail markets. That, coupled with the existence of more than one distributor, of course, adds a degree of competition into the equation, something which is singularly lacking here in Shetland.

If the cost at the pump is, in fact, dependant on the distance the fuel is transported by road, why then is the nearest station to the North Ness one of the most expensive on the mainland (of Shetland) and the Aywick shop in Yell one of the most reasonable?

Perhaps the saddest part of the whole thing is that, when I remarked on the price discrepancy to the young lass behind the counter she seemed to think that “It wasn’t that bad”, thereby confirming that most people are just complacently accepting the situation, and are being taken to the cleaners every time they fill up!

Colin Hunter,


Add Your Comment
  • Laurence Farmer

    • October 17th, 2013 12:51

    Where a market has only a few suppliers they may decide to collude, forming a cartel. The market is transformed into a virtual monopoly and competition disappears. Cartel members can set prices high and enjoy increased profits. Meetings of merchants end in conspiracies to raise prices.

  • Stewart Mac

    • October 18th, 2013 12:47

    The price of fuel is, and remains extortionate and the explanations i have thus far heard from GB Oils and indeed the OFT are nothing short insulting to our collective intelligences.

    It still remains a mystery to me why the retailers in Shetland continue to put up with it – its not rocket science to either individually or collectively buy their own fuel from a mainland source. i have looked into it, and in particular the regulatiosn and whilst its not quite as simple as filling up a bowser at the nearest Asda, its not as bad as some would have you believe! – And before i hear (some) cry what about all the storage facilities etc? well if evan half-heartedly organised it would be possible to bring a full tanker up, off load at the one or more stations and back on the boat the same night. More expensive than bringing up 500,000 litres or so at a time but cheaper than GB Oils prices (where is David with his Vile capitalistic comments?)

    Imagine the trade at Grantfield (other fuel stations are available!) if their fuel was even 5p per litre lower than the rest, let alone 10p or more. But if they dont want to arrange it, and the buying public are not pushing them, why would anybody want to change?

  • Richard Millican

    • October 28th, 2013 18:32

    Here in Anglesey in North Wales, we’re paying an additional 3p to 6p per Litre (even at Tesco’s and Morrisons), compared with the general costs of fuel over the bridge in mainland Wales.

    It’s only a 90 Minute run to Manchester where fuel prices can be as much as 10p a litre less!!

    It’s a nationwide problem, simply the further away from a Large Town or City … the more you pay! …. EVERYWHERE!!

    Fuel prices at the pump should be standardised, just like hydro / water / and gas

    Richard Millican
    Cemaes Bay, Anglesey.

  • Johan Adamson

    • October 29th, 2013 13:31

    Big retailers like Tescos are able to get bigger discounts from suppliers because they can buy and sell more goods. This disadvantages us as the operator buying our fuel, or the shop buying other goods to sell, either cant command such good discounts or does not pass these on to us. The answer is to have Tesco supplying our fuel but that would knock out every other fuel station in Shetland as it has done in Caithness. And we still might not get cheaper fuel as they might not call it the same name, maybe Tesco Rural Services, so they dont have to sell it at the same price as on the mainland.

  • David Spence

    • October 31st, 2013 15:04

    Johan has a point in regards to Tesco’s providing fuel at far cheaper rates than local suppliers here on the islands. When Tesco’s first took over the Supermarket here in Lerwick, there was talk about it building a petrol station in front of the supermarket (was then a green, grassy piece of land and not a car park as it is now) but nothing has come of it………….which I am not sure why this is the case (may be somebody can inform us regarding this issue?).

    I have to agree with Laurence in regards to, as the perception is, a cartel of people (businesses) fixing or rigging prices here in Shetland not only for fuel but for other goods as well due to our circumstance of being cut off from the mainland and our isolation which is ideal for certain greedy orientated capitalists (there you go Stewart lol) to take advantage of this and make us pay over the odds.

    I have even noticed the price of certain locally produced goods in the supermarkets, where it is the same price as what it is in smaller shops in the town……..which does make you suspect there is an agreement between businesses here in Shetland of setting the price of certain goods. (but far be it for me to think of conspiracy theories lol)

  • Claire Stanton

    • November 15th, 2013 18:14

    I also can not understand why the price of fuel is so expensive in Shetland. I now stay in Lossiemouth between Aberdeen and Inverness. The price of fuel here tonight at Tesco was £1.289 per litre and has be going down over the last few weeks. I hope that something can be done to address the higher prices in the Islands as it appears totally unfair.


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