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Thursday, 13 July, 2000, 14:04 GMT 15:04 UK
Highlands fuel prices 'in the clear'
Highlands petrol pump
Retail margins in the area are higher than the rest of the UK
The Office of Fair Trading has found no evidence of profiteering from fuel prices in the Highlands and Islands.

The results of an 18-month investigation into the price of petrol, diesel, heating oil and marine diesel have been published.

The OFT found: "The continued reduction in the number of retailers over the last six years suggests that the market has been competitive and there is no evidence of any general problem of excessive pricing or profits."

But a further investigation is to be held in the Western Isles, where "it cannot be concluded that the market ... is working competitively".

The investigation began after complaints from the Highlands and Islands Action Group on Hydrocarbon Fuel Prices (HIAG).

'Massive' mark-up

During the OFT inquiry, the group commissioned its own survey which found a multi-million pound mark-up on prices north of the Highland line.

OFT investigators found "no sustained widening" of the difference between pump prices between the Highlands and Islands and the rest of the UK.

"The differential has fluctuated since 1996 but over the last year has been on average lower than that reported on by the Monopolies and Mergers Commission in 1990 when expressed in prices at that time," their report said.

More work is to be done on the islands
There was no evidence of excessive profits at wholesale level, but the position on retail margins was "less conclusive".

"Retail margins are higher than in the rest of the UK but bearing in mind the lower volumes that are typically supplied by retailers, a higher margin will be needed if smaller retailers are to stay in business."

In the Western Isles, where prices are about five-and-a-half pence a litre higher than elsewhere in the area, the review said it could not be concluded that the market was working competitively.

Agency cards

"This cannot be explained in terms of lower volumes or by what we currently know about costs.

"Further information is needed about the effects of the use of agency cards and the impact these have on income at both the retail and wholesale level," the report stated.

A Western Isles Council spokesman welcomed the further investigation but said the broad verdict was disappointing.

SNP fuel campaign launch
The SNP says drivers are being fleeced

Scotland Office Minister Brian Wilson welcomed the report and said: "This reinforces my view that the issue of price differentials will not be resolved on the basis of market forces.

"If petrol prices are to be reduced in the Highlands and Islands, it will require both government initiatives as well as the co-operation of the oil companies."

The Scottish National Party recently attacked the price of fuel in Scotland, claiming it was the highest in Europe.

'Fig leaf removed'

Its MSP for Inverness East, Nairn and Lochaber, Fergus Ewing, said: "Labour have been using the expectation of the OFT's report into high fuel prices as an excuse for doing nothing against the high cost of petrol and diesel that discriminates against motorists in the Highlands and Islands.

"There is now no hiding place for them in taking action against the high cost of petrol and diesel in the area. Their fig leaf of an excuse has been removed."

Motorists across the UK are being urged by the "Dump the Pump" campaign to boycott garages on 1 August in protest at the price of petrol.

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See also:

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Motorists hit by petrol 'rip-off'
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