The head of GB Oils today struggled to persuade the council’s transport body why motorists in Shetland pay more at the pumps than their mainland counterparts.
Addressing a meeting of the ZetTrans committee, Sam Chambers denied his company was abusing its market dominance in the Northern and Western Isles, insisting there was a key difference between perception and reality.
In a well-mannered, hour-long meeting Mr Chambers agreed fuel was a highly emotive subject, adding some of his staff members had been subjected to abuse over the issue.
He said the Office of Fair Trading was automatically notified of any company which operated with a turnover of over £75 million.
But there was concern over why there was such a large differential between island prices and those charged down south.
Mr Chambers said his company had made a profit margin of 4.24 pence a litre in 2010/2011 on a litre of diesel, while transporting the fuel to Shetland had cost 2.7 pence a litre.
Many attending the meeting, including fuel retailers from around the isles, said roughly six pence per litre was left unaccounted for.
Andy Steven, of Promote Shetland, said he was increasingly “concerned and frustrated”. ”I’m angry because we can’t get to grips with that 6p,” he added.
Mr Chambers insisted his company’s margins were reasonable, adding diesel was an incredibly expensive fuel to provide.
“These are figures the OFT have and they are open to be scrutinised by anyone. Fuel is expensive and we never thought fuel would become as expensive as it is now.”
He added the expected dominance in future years of bio-fuel would lead to a necessary overhaul of major infrastructure, even though the Scottish islands only accounted for two per cent of the volume sold.
Questioned by Scott Preston of Tagon Stores, which slashed its prices at the weekend to raise the issue of high fuel costs, he said he sympathised with people who – faced with petrol and diesel prices – had been forced to make some difficult choices.
“As I’ve said, the margins we get are not immune to criticism. But in reality, it’s a business and we have got to make a return.”
Also attending the meeting was isles MSP Tavish Scott, who had persuaded Mr Chambers to attend Shetland and address concerns.
Speaking afterwards he said: “It was good today that the council were able to bring together petrol retailers across Shetland, other interested transport parties and many other people to at least hear Sam Chambers explain what his business is and how much money they make on fuel in Shetland.
“I think there, at that point, we stopped understanding because there is still a difference between the gross margin that GB Oils make, and the difference between prices here and prices in the mainland, and that’s the difference we simply don’t yet have an answer for.
“We were there to establish what makes up that difference because that’s the most important figure in our ability to do something about it. If we were able to say, ‘look, it’s clearly profit being made by the company’ then we could say to the government you’ve got statutory powers do something about it.”
Originally posted here:
Fuel firm boss leaves islanders none the wiser about high prices