Fuel duty cut months away

A CUT in fuel duty in the northern isles could take months to implement, according to local MP Alistair Carmichael.

This week the coalition government’s deputy chief whip has also raised the issue the price of heating oil, calling for an investigation into the UK’s largest supplier.

Mr Carmichael said that a formal application to the European Commission for a discount of up to 5p on a litre of fuel in certain remote areas would not be made until after the Budget on 23 March.


The Liberal Democrat said that it could take months to be processed as the government was “pushing the envelope”, asking for the biggest derogation ever requested from the EC.

Plans to introduce the discount were announced in October last year by fellow Liberal Democrat Danny Alexander, chief secretary to the Treasury, who said that a pilot scheme would include the northern and western isles of Scotland and the Scilly Isles.


Mr Carmichael said: “We’ve got a government now that is taking this seriously, that is pushing it on as hard and as fast as it can be done. It’s never going to come fast enough for me but I’m content that government are doing everything that can be done here.”

Meanwhile the northern isles MP has backed calls for an investigation of Dublin-based fuel company DCC Energy, after accusations that it has been profiteering during the cold weather.

The largest home heating oil supplier in the UK is said to own a string of subsidiary fuel companies and a number of price comparison websites, and has been accused of claiming a ‘best price’ that is up to 65 per cent more than genuine independent retailers.


Mr Carmichael said that the stories had caused a great deal of anxiety in the islands and needed to be investigated by the Office of Fair Trading (OFT).
“It is essential that that these concerns should be properly and independently investigated. That can only be done by the OFT and these stories strengthen my view that a full investigation is long overdue. In the past, the OFT has come up with spurious reasons not to look into this issue. That is no longer good enough,” he said.
“During the recent period of cold weather, people with oil-fired heating systems were facing energy bills that had increased by up to 50 per cent since September 2010. While the cost of kerosene has risen over this period I see no legitimate reason why consumers in the northern isles should face price hikes of this magnitude.
“These revelations underline the importance of a full investigation of the liquid fuel market in Orkney and Shetland and I will be following up with the Office of Fair Trading to ensure that the points raised in the media over the weekend are taken fully on board.”

Mr Carmichael and northern isles MSPs Tavish Scott and Liam McArthur have already written to the OFT recently asking for an investigation into the liquid fuel market in Orkney and Shetland.  Their letter followed sharp increases in the cost of heating oil and automotive fuel in the isles.