Probe into ‘profiteering and high pump prices’

A national investigation into fuel prices in theWestern Isles will focus today on allegations about profiteering and excessive pump prices.

TheOffice of Fair Trading (OFT) is taking evidence in Stornoway from campaigners, businesses, petrol retailers and suppliers. It is investigating whether fuel prices are high because of lack of competition between retailers in island and remote communities.

The inquiry is being held amid concerns that dominant supplier Scottish Fuels is holding a number of independent service stations to five-year contracts.

An OFT spokesman said it was also looking for evidence on the “rocket and feather” effect, whereby pump prices fall at the speedofafeatherbutrise at rocket speeds whenever the price of crude oil changes, and whether supermarkets and major oil companies were making it more difficult for independent retailers to compete.

Kyla Brand, OFTScottish director, is expected to coordinate today’s evidence sessions at Western Isles Council’s headquarters in Stornoway.

Petrol retailer Gordon Maclennan, who has reduced pump prices at his Back Filling Station by 9p a litre, is one of the witnesses due to give evidence. He has said he was able to cut prices simply by changing suppliers from Scottish Fuels to Highland Fuels.

Scottish Fuels defended its policies yesterday, insisting: “The price at thepump is set by the retailers.”

TheOFTplans to publish its findings in January 2013.