The Office of Fair Trading has concluded that drivers who live in Scotland's rural and isolated communities are not getting a raw deal, despite having to pay at least 6p a litre more than the UK average for their petrol. But they are paying the price of living and driving in areas whose diminishing number of petrol stations are more expensive to supply and are not subject to the urban market imperative to slash prices to attract custom. That is only part of the story, however. More oil companies should follow BP's lead and also provide an effective subsidy to the independent filling stations which enables them to reduce the price differential between rural and urban areas by about 50%. BP has enhanced its image as a socially-conscious company and fully deserves to sell more petrol than its rivals.
But the intense competition which
benefits urban motorists continues, paradoxically, to make it even more difficult for rural drivers to shop around for cheaper petrol. There has been a 60% reduction in the number of petrol stations in Britain in the past 35 years and in the next two years a further 500 are expected to close in rural areas because of the ruthless price war involving the petrol companies and the supermarket chains. We can be sure that
the Highlands and Islands will suffer more than their share of forecourt blight. Supermarkets are a major player and are able to cut their prices because of their lower overheads which reinforce their strategy to attract customers into their superstores via their filling stations. Companies such as Esso seek to compete by matching the cheapest local price, an exercise whose cost it expects to recoup partly by closing rural outlets. This development is deeply unfair to the rural motorist, who faces the prospect of having to drive even further (using up more petrol in the process) to buy dearer car fuel. And in a real sense he ends up helping to subsidise the urban motorist who benefits from real choice and much cheaper petrol.
The car is essential to our isolated communities. It is virtually a lifeline. Yet it is not recognised as such by the petrol companies (BP excepted) or, for that matter, by the Government. The OFT report will disappoint the rural lobby, which had hoped for an explicit stating of the case for rural motorists getting a fairer deal. Complaints about petrol prices generally are most common when the cost of crude oil falls, as has been the case recently. The OFT has helpfully explained why this has a marginal impact on petrol prices. It is largely because taxation accounts for about 80% of the pump price. The Chancellor should remember that well in the run-up to the next Budget so that he avoids the easy but irresponsible temptation again to increase petrol duty. The rural motorist's vested interest will, we trust, be promoted by the Scottish Parliament. No case can be made for further hammering
him and his truly essential car.
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