24 Jan 2000
Scotland Office Minister Brian Wilson today challenged the oil companies to do more for Scotland’s rural communities by cutting the cost of petrol to low-volume outlets in remoter areas.
Mr Wilson told a conference in Edinburgh:
"There is no simple solution to the problem of transport costs in rural parts of the country, including the less populated parts of Scotland. Under EU rules, it is not possible for the Government to set varying levels of duty in different parts of the UK.
"The market in petrol is extremely complex as successive inquiries and reports have found. For instance, many rural petrol stations are within easy reach of town and city supermarkets where petrol is sold at margins which they cannot economically match.
"There are limitations to the measures which Government can or should take to intervene in these circumstances. I am sure there will be a general welcome for some of the steps we have taken - such as the abolition of the fuel duty escalator and the allocation of £170 million, including £14.2 million for Scotland, to support public transport in rural areas.
"However, not all the responsibilities lie with Government and there is an opportunity here for the oil companies to act as good corporate citizens by implementing an initiative of their own, directed specifically at those parts of the country where petrol costs are highest.
"As the Highland Council’s petrol price study has confirmed, by far the largest part of the price differential comes not from duty or VAT but from the price charged by the wholesaler to the retailer. It is well within the power of the suppliers to remove this element of disadvantage at marginal cost to themselves, or to the pricing network as a whole.
"I am today asking petrol suppliers to consider offering rebates or lower prices to retailers in the more remote areas who sell below a certain volume threshold per year. In effect, I want them to pass on a discount to those retailers who sell the smallest volumes of fuel. This could have a significant impact on the economies of those parts of the country which are most genuinely affected by high petrol prices.
"There are the places which suffer the double jeopardy of remoteness, which necessitates high levels of road use, and exceptionally high petrol prices, perhaps a consequence of the low volumes involved. I believe that the oil companies would be widely applauded for such an initiative which would go a long way towards addressing the reality and perception of unfairness towards our remoter communities.
"There is more to rural transport than fuel prices. Ferry services provide for many what is the most necessary route to the mainland. I know that the Executive and the Scottish Parliament view the provision of ferry services as a high priority. Curiously, one ferry service that is under review is a reserved matter - the Ballycastle-Campbeltown service. I have been working to try and preserve this service for the communities on the Kintyre peninsular. I believe the service offers considerable potential and I shall continue to do all I can for it.
"We all have a part to play - Government, the Scottish Parliament and the Executive, local government, the private sector and the voluntary sector. I hope that petrol companies will think afresh about their approach in the remote areas. I know the Government has a responsibility to do likewise, and the consultation exercise on Air Passenger Duty is a demonstration of the Government’s fresh thinking about particular transport issues. I hope that all of us with an interest in this can continue to work together for the benefit of rural communities."