DRIVERS in the Western Isles should see lower fuel prices after filling stations were freed from having to buy from a single supplier, a UK Government watchdog has announced.
The Competition and Markets Authority (CMA) yesterday said forecourts would now have greater flexibility to choose whether to buy fuel from Certas Energy UK or another firm.
Many were previously forced to agree to buy fuel from Certas for five years.
Petrol in Stornoway costs 135.9p, according to the petrol prices.com website yesterday, nearly 5p more per litre than the Scottish average of 131.1p reported by the AA last week.
The CMA said its move also covered Certas’ marine terminals in Stornoway and Loch Carnan in South Uist.
The decision follows a CMA and Office of Fair Trading investigation into a “possible infringement of competition law” in the islands.
Ann Pope, the CMA’s senior director of antitrust enforcement, said: “We are extremely pleased to have secured these commitments from Certas, which offer a real opportunity for rival fuel distributors to enter the Western Isles market.
“This should ultimately help make fuel prices more competitive and benefit people and businesses in the islands.”
However, the AA warned motorists that prices might not come down. Spokesman Luke Bosdet said: “Clearly, the CMA believes greater competition will lead to better pricing, and the AA hopes that is the case.
“However, the experience of fuel prices in the UK is suppliers and retailers watch and match each other’s prices, sometimes producing prices that are artificially higher than elsewhere.
“There is still the fundamental problem of not having published wholesale prices – unlike the United States, Australia and south-east Asia – for petrol and diesel. Without it, the islanders cannot tell whether pump price movements fairly reflect the costs to the suppliers.
“The classic example of that came with the introduction of the 5p-a-litre duty rebate, which coincided with a 10p-a-litre surge in wholesale price. Drivers expected the rebate to push money back into their pockets, but the opposite happened.”
Neil Greig, policy and research director of the Institute of Advanced Motorists, said: “Only time will tell, but free competition should deliver cheaper prices in the long run.
“The key will be how many new players enter the market. If the supermarkets can be persuaded to take part, then we could see some real price cuts.”
SNP Westminster transport spokesman and Western Isles MP Angus MacNeil said: “This is welcome news.
“It just goes to show that what can sometimes look difficult in politics, even insurmountable, can change if the right pressure points are applied.
“I am glad this is happening for the motorists of the islands who should see the benefits of increased competition filter through at the pumps.”