Na h-Eileanan an Iar SNP MP, Angus MacNeil is to write to both the Office of Fair Trading and the Department for Business, Innovation and Skills (BIS) on the matter of fuel contracts between fuel distributors and retailers.  This comes in light of a truly staggering cut in fuel by 9 pence a litre, in one fuel station on the Isle of Lewis.

Angus MacNeil said:

“We have seen in the last week that the courageous move by one fuel retailer of changing fuel supplier, has led to a reduction of at least 9 pence a litre merely by changing fuel suppliers.

“It would appear that there are anti-competitive practices working against the customer when retailers are tied to the one supplier.  I understand that some retailers are contracted to the one supplier for as long as five years, which means while there might be competition amongst retailers there is effectively no competition between suppliers and therefore the competition between retailers can only be a mirage.  I think that the one-step the OFT and or the Government at Westminster could take is to end these practices which they have allowed to build up.

“The five-year strings attached contracts usually involve the supplying of pumps and signage at fuel stations as well as rebates back to the retailer on the fuel sold, which for some retailers has been as low as a 1½ pence, some retailers 3½ pence and some retailers I am told as high as 5 pence.  All this helps to tie in retailers on an ongoing period with their suppliers and to my mind is working against the customer, by keeping prices high, as we have seen.”

“Surely, fuel distributors should be selling their fuel in competition with each other and retailers able to purchase freely which would be to the benefit of the customer.

“The recent Libor bank rate manipulation scandal has shown how very complex markets can be manipulated, I think that the lack of freedom retailers have to switch fuel suppliers is working against the best interests of consumers, families and businesses in these tough economic times.”