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| Islands oil discount 'profiteering' claim | Islands oil discount 'profiteering' claim |
| (about 7 hours later) | |
| The Treasury has warned oil suppliers against attempting to profiteer from a discount scheme for island motorists. | The Treasury has warned oil suppliers against attempting to profiteer from a discount scheme for island motorists. |
| From Thursday, the UK government is cutting the duty on diesel and petrol on islands by 5p per litre. | |
| But in the past week, rises in the cost of fuel supplied to Orkney, Shetland and the Western Isles put up prices by more than the proposed discount. | |
| Distributor Scottish Fuels said the increase reflected the rising worldwide price of fuel. | |
| The Lib Dem MP for Orkney and Shetland, Alistair Carmichael, claimed there had been no corresponding increase on the mainland over the same period. | |
| The UK government scheme will cut fuel duty in the Inner and Outer Hebrides, Northern Isles, islands in the Clyde and the Isles of Scilly. | |
| Fuel retailers on the islands will receive a 5p a litre rebate on the petrol and diesel they purchase but the government stated they would be required to pass on the full saving to the customer. | |
| Petrol and diesel at island pumps can be 20p more expensive than mainland prices. | |
| Sam Chambers, a director of Scottish Fuels, strongly denied any suggestion the company had been seeking to boost profits ahead of the discount scheme being introduced. | |
| He told BBC Radio's Good Morning Scotland programme: "How can you profiteer if you are making 2.6p per litre? | |
| "The margin we make is to cover our transport costs, we have drivers to pay. The public perception and reality are not exactly the same. | |
| "We are quite prepared for our company's figures to be scrutinised by anyone independently as to what we actually charge. We do not set the retail price on the islands - they are set by the retailers. | |
| "We import it and we sell it, and we do it, we think, to the best of our ability." | |
| Mr Chambers said the company's profit margins had not increased since it acquired the business from BP in 2007. | |
| He added: "The main people who make money out of fuel are Her Majesty's government. There is 20% VAT and there's 57.9p duty on it." | |
| 'Dramatic spike' | |
| Mr Carmichael told the same programme it would be a "very strange coincidence" for prices to have increased by 5p in the week leading up to the discount being introduced. | |
| He said: "The evidence that I got passed to me by a journalist in Shetland last night was that a local garage there had had the price they were required to pay put up 2p per litre this week and 3p per litre last week. | |
| "Now if you look at the way that fuel prices move over the country as a whole, taking the figures that I took from the AA website this morning, you've seen price increases of 1.3p per month in January and February of this year. | |
| "I think the question that has to be answered, and that I am determined will be answered, is why do you see a dramatic spike of this sort in the isles that does not seem to be reflected in the rest of the country?" | |
| Chief Secretary to the Treasury Danny Alexander is expected to be in Scotland for the launch of the discount scheme. | Chief Secretary to the Treasury Danny Alexander is expected to be in Scotland for the launch of the discount scheme. |
| Western Isles Council - Comhairle nan Eilean Siar - has described the rises as "astonishing and disappointing". | Western Isles Council - Comhairle nan Eilean Siar - has described the rises as "astonishing and disappointing". |