Competition worries force GB Oils to sell Western Isles fuel interests

A FUEL distribution business has offered to sell its newly– acquired interests on the Western Isles over competition concerns.

The Office of Fair Trading said yesterday that it was considering an offer by Cheshire-based GB Oils to dispose of the Brogan oil distribution operations it acquired last year as part of a wider deal.

GB Oils, part of Irish-listed conglomerate DCC, bought out Motherwell-based Brogan in a 42.5 million deal.

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The watchdog has since said that the merger raised competition concerns in the Western Isles, where the enlarged group would have accounted for almost the entire supply of heating oils and transport fuels.

In addition to offering to dispose of the distribution business on the islands, GB Oils also said it would offer a potential purchaser a fuel storage facility at its marine oil terminal in Stornoway.

Amelia Fletcher, OFT senior director for mergers, said: "The OFT received a large number of complaints regarding the impact of the merger in the Western Isles. After a careful investigation, we agreed that there were competition concerns.

"Once finalised, we are confident that the divestment package will restore pre-merger levels of competition for the distribution of heating oils and transport fuels."