News / GB Oils defend isles’ fuel prices
FUEL prices in Shetland are higher than elsewhere because of the islands’ remoteness and the relatively small amount of petrol, diesel and heating oil that is being sold by a large number of small retailers.
That was the message from Sam Chambers, the chairman of GB Oils, which owns the North Ness oil tanks, controls fuel distribution into the isles and operates the Leask petrol station at Gremista.
Mr Chambers was speaking at a meeting of Shetland transport partnership ZetTrans in Lerwick on Monday afternoon, which was attended by around 30 members of the public.
Rejecting any accusations of profiteering, Mr Chambers said he would not hesitate to sell the business supplying fuel to the Scottish islands the moment anyone made him an offer.
The supply of fuel to Shetland, Orkney, the Outer and Inner Hebrides amounted to just two per cent of GB Oils’ business, but created about 95 per cent of the hassle, he said.
Allowing a glimpse into the company books, he said that in 2010/11 GB Oils made a gross profit of 4.24p per litre diesel distributed in the isles, well below what the government would regard as reasonable.
Shipping fuel to the isles amounted to 2.71pence in additional cost, he added.
Mr Chambers added that fuel prices in the isles were to rise further when EU regulations on bio fuels come into force, which would force the company to make further investments into its storage facilities.
He said the proposal to abolish VAT on fuel sold in the Scottish islands would be a far more effective way of reducing fuel prices and fighting fuel poverty.
Defending the company against accusations from retailers that high fuel prices were driving them out of business, he said: “We are not exploiting people, and a lot of retailers are making money from selling fuel.”
Speaking after the hour long meeting, he added: “You are paying for remoteness, you are paying for the small volume that is going through. You have quite a high number of retail sites, and there is a fixed cost in running all these retail sites.
“We are running a terminal with the small volume going through it and that is actually more expensive as well. It is quite easy to work out the aspects of how the cost is made up.
“We said time and again that we are open for an independent company to come in and look at this. The Office of Fair Trading are currently looking at this and we positively encourage them to do so because does no good to have continuous criticism about the high cost of fuel.”
GB Oils was not profiteering by exploiting its monopoly, he insisted. “The company is making a return for its capital investment, and as we keep saying: the main people making money out of this is the government because there is VAT and fuel duty on every aspect of this.”
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