Islanders’ fuel discount eaten up by pre-emptive price hikes


By a Newsnet reporter

With the long-awaited island fuel discount scheme about to start, the SNP have raised concerns over a loophole which means hauliers receive no benefit from the plan, as a row broke-out between LibDem MPs over whether island motorists will actually see any benefit of the 5p per litre fuel discount scheme because of recent price hikes.

When the pilot begins tomorrow the discount will only be available on fuel drawn from service station pumps, and not on fuel delivered in bulk to hauliers, for example. SNP Westminster Transport spokesperson, and Western Isles MP, Angus MacNeil is now calling for the Treasury to take action to address the problem.

Meanwhile, speaking on BBC Good Morning Scotland on Wednesday morning, LibDem Whip Alistair Carmichael, who represents Orkney and Shetland, warned that there was a danger people would not benefit from the discount because fuel prices had increased by 5p over recent weeks.

Mr Carmichael said that there was evidence that fuel pump prices in Shetland were being increased in advance of the discount, saying, “a local garage had had the price they were required to pay put up 2p per litre this week and 3p per litre last week”.

Mr Carmichael was asked if that meant there would be no difference in the price paid by motorists when the discount comes into effect, he replied: “That’s the danger.  As of tomorrow there is taxpayers’ money going into this scheme and I think taxpayers are right to have an entitlement to demand answers as to why the [price] spikes are coming in this way and at this time.”

Meanwhile, his LibDem colleague and Treasury Minister Danny Alexander attacked “naysayers” claiming the scheme would make a difference.  

Mr Alexander said:

“It’s terrific that islanders in Scotland and the Isles of Scilly will finally begin to see a cut in fuel prices after years facing higher costs. This will make a real difference to people who face the highest fuel costs in the country.  The Government has shown the naysayers that real action is possible and this discount will deliver real benefits to motorists and businesses in remote island communities.”

Commenting, Mr MacNeil said:

“The whole point of this scheme was to help households and businesses with the soaring cost of fuel, but before the pilot is even underway the Treasury have excluded hauliers from the benefits of the scheme.

“This is a Treasury problem and Danny Alexander, as Chief Secretary and as a Highland MP, must step in to ensure that hauliers are not excluded from this scheme.

“With fuel prices having increased by the equivalent of the discount over recent weeks, and the average fuel prices having increased by almost 20p per litre since Danny Alexander first mooted the idea of a discount scheme there are clearly real questions over whether people will feel the benefit of the discount.

“It is clear from the contradictions between Danny Alexander and Alistair Carmichael that there are growing doubts about how effective the pilot will be.  It’s less than ‘terrific’ to see a discount disappear in a week of price rises.

“It is simply unacceptable that in energy-rich Scotland, motorists and businesses are struggling to cope with prices at the pump.  These record fuel costs are putting a huge and unnecessary amount of pressure on our communities and on vital sectors of the Scottish economy, and risk choking the recovery we are building in Scotland.”