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OFT needs proof of fuel price rule breaking

AN OFFICE of Fair Trading study into how markets work in remote communities should help local people to get better deals, according to the agency’s Scottish representative Kyla Brand.

Yet it will not bring immediate improvements unless islanders themselves demand more transparency and fairness from business and service providers, or lobby local politicians.

On the major bugbear of fuel prices the OFT continues to gather evidence that eventually might lead to an investigation under the Competition Act.

Just 15 people turned out for a public meeting hosted by the OFT at the Islesburgh Community Centre, on Thursday evening.

During the well organised two hour long session participants were encouraged to work in groups to identify the key issues consumers and businesses were facing in Shetland.

They were:

  • lack of choice in health services, particular dentistry where people were forced against their will to “go private” due to the long NHS waiting lists;

  • overpriced professional services where only a few providers control the market;

  • fuel prices (petrol, diesel, heating oil) that are 10 to 15 per cent higher than on the Scottish mainland;

  • lack of charge free cash machines in rural areas, reduced opening times of the remaining post offices, and difficulties for small businesses to access banking loans;

  • poor broadband speeds in many outlying areas discouraging people from taking full advantage of the internet, either commercially, educationally or as a social medium;

  • broadband speeds also suppressing Shetland’s economy and encouraging many young people to leave the islands for good;

  • local retailers regarding online shopping as a threat to viability of their shops;

  • government fuel payments not taking account of the wind chill factor;

  • additional cost for individuals accessing health services that are free, such as staying in Aberdeen while a family member is in hospital;

  • dynamic fare structure for flights in and out of Shetland unfair and not in compliance with the lifeline nature of service;

  • difficulties getting access to the local electricity grid for small domestic renewable energy projects.

Those present on Thursday were also asked to discuss ways to overcome those disadvantages, including:

  • community development groups, such as Northmavine Community Development Company, running local services such as shops, post offices etc;

  • high level of volunteering and community spirit compensating for some of the disadvantages;

  • shopping around to get prices for services from the mainland and then bargaining locally to get reductions;

  • buying locally to strengthen the local market;

  • introducing competition, such as Shetland Telecom, which has prompted BT to upgrade some of the exchanges to higher speed broadband.

After the meeting, Ms Brand said: “I think one of things we will be able to do is to help islanders demand more transparency, and therefore put themselves in a more powerful position to either get the best possible price for them, or to inform the kinds of policy driven solutions that might make a difference for them.”

Referring to the OFT’s separate research into fuel prices, she added: “What we have undertaken is to look at the price differentials to really understand what the movement of price over time is.

“Where you have a market that is highly volatile, the impression that individuals have on a day to day basis is not necessarily indicative of a seriously different set of margins at different stages in the supply chain.

“We will be continuing with that work, and on the basis of that we will be able to determine whether there are grounds for using the kinds of powers we have for a full investigation.

“We do not have the powers simply to move to a Competition Act investigation unless there is some clear evidence that there is some sort of transgression of the rules.”