Petrol crisis: Pump prices near record levels

Beleaguered drivers, haulage chiefs and taxi operators will be hit hard in the pocket by pump pay hikes which have already seen prices across Edinburgh and the Lothians crash through the £1.40-a-litre barrier.

Some of the most expensive fuel in the area was being sold at the BP Malthurst, Newbridge, next to the M8/M9 junction. It was selling unleaded for 140.9p and diesel for 145.9p as tanker drivers employed by the multinational giant took strike action at the Grangemouth refinery.

About 40 BP drivers mounted a picket line from 4am yesterday in a row over pay and pensions, vowing to continue the strike for 72 hours amid threats of a further four days of industrial action starting from Thursday.

A fuel price report released by AA showed petrol sales across Britain had fallen to the lowest levels tracked by government in 23 years as motorists across Edinburgh were warned to brace for further price rises before Easter.

Neil Greig, policy director for the Institute of Advanced Motorists, said the existing record average petrol price of 142.2 in the Capital from April last year may be matched in weeks.

The average petrol price had risen to 137.8p as of Monday – a 5.4p rise in just over a month.

Mr Greig said: “It’s looking really bad this time. The oil price has gone up, the wholesale price has gone up and paying in dollars – all these things seem to be combining to push the price back up to these record levels.

“I fear that Edinburgh and the Lothians are not going to be exempt from that. The best hope you have is if you are in part of Edinburgh where the supermarkets have special offers or are competing with each other.”

Mr Greig said he would welcome the introduction of an accurate fuel price comparison system managed by the UK Government rather than private investors, allowing motorists to go online each day and check the cheapest fuel in their area.

He said: “There are some countries in Europe – I think Austria and Denmark – where they have official websites where the petrol retailers have to tell the government what the price is and then that information is passed to consumers.

“There is a need for cheap, free, easy access to petrol price information.”

The Office of Fair Trading (OFT) last month ruled out a full inquiry into Britain’s soaring fuel prices, claiming there was no evidence drivers were being ripped off.

Critics have labelled the decision a “whitewash”. Labour has called for a temporary cut in VAT, saying it would take 3p off the price of a litre of fuel.

FairFuelUK campaign founder Peter Carroll said of the conditions in Edinburgh: “We think it’s a perfect storm. We’ve got the failure of the OFT to do a proper investigation into the market and since that was announced prices have risen significantly.

“We’ve got the Budget coming up where he [Chancellor George Osborne] is likely to wave through his tax rise plans for September. You’ve got families and businesses at breaking point. You’ve got fuel hitting record levels and the economy’s on its knees.

“Our plea to the government is simply this – cutting fuel duty substantially is the easiest and quickest way to give the economy the kick it needs to get it growing.”

RAC Foundation director Stephen Glaister said: “In rural Scotland, for example, where there is naturally less fierce competition and fuel retailers face higher costs of distribution, prices will inevitably be higher.

“Add in a strike like the one in Grangemouth and you may see even higher prices at the pump where this adversely affects competition.

“But we also mustn’t forget that the lion’s share of the pump price goes straight into the government’s coffers – about 60 per cent.

“Clearly it is as much to blame as anything else.”

The dire predictions came as Edinburgh Airport reassured passengers its operations would not be affected by the latest supply issues.

It nearly ran out of fuel after an unprecedented two-day crisis in October last year linked to a contamination incident at the Grangemouth refinery.

The airport was reduced to rationing fuel supplies, which dropped as low as seven per cent of its 1.4 million litre tanks.

A spokesman said: “We are monitoring the situation closely and are continuing to hold discussions with our business partners on potential contingency plans in order to ensure sufficient fuel supply and minimise disruption to our passengers.”

The dispute has come on the back of the imminent transfer of a lucrative aviation contract from BP to logistics group DHL.

Unite industrial officer Tony Trench said: “We’re in this for the long haul. On a normal day up to ten million litres of fuel will pass through the refinery gates and out to airports and forecourts across the country, but not today.

“Our message to BP is simple – do the right thing. Pay up or our members will suffer.”

BP estimated the pool of drivers on strike would typically make about 45 deliveries each weekend to service stations across Scotland, including to 14 outlets across the Lothians.

But company spokesman Mark Salt said supply issues would not affect the pump price at local BP stations, with contingency plans put in place to deal with supply demands caused by the strike.

He said: “Our stocks are at good levels. This kind of thing is not unusual – there are times when you have some places where they can’t supply for a couple of days for some reason, or there’s some incident.

“We have a team of guys who work on these things regularly. They work to get product from other places – either getting delivery drivers from other places, or getting deals from other outlets to supply our sites.”

The AA said drivers across Britain had consumed 1.465 billion litres of petrol last month, down 14m litres on the previous all-time low in March last year.

Group spokesman Luke Bosdet said: “We are now in the third petrol price spike in the past 12 months and we can expect prices to go up a bit more before they start to fall away. It means drivers are cutting back on fuel consumption.”

Rocketing fuel prices are particularly hurting taxi operators and tradesmen across Edinburgh.

Central Taxis director Tony Kenmuir said profit margins were tighter than ever, with a small hike of 5p at the pump equating to a £1200-a-year pay cut for full-time drivers.

Drivers were allowed to add 20p to the meter to take into account higher fuel costs under temporary measures introduced by the city council in 2011.

That tariff addition has since been removed, but Mr Kenmuir said: “There’s no mechanism to react if our costs suddenly increase like that. If there’s a sharp increase we’ll appeal for help, but whether we’ll get any or not, who knows?”

Areas such as North Berwick, which has two main petrol stations run by Esso and Tesco, are also vulnerable to price hikes.

North Berwick ward councillor David Berry said: “If you’re going to run a business – for example, delivering products, as a taxi or even just getting around in a van – it does hit you because the distances at this end of the county are greater.”

MOST EXPENSIVE FORECOURTS IN LOTHIANS

1. BP Malthurst Newbridge, Cliftonhall Road, Newbridge (140.9p petrol, 145.9p diesel)

2. BP Forthview Connect, 10 Builyeon Road, South Queensferry (139.9p, 147.9p)

3. BP Malthurst, 41 Ratcliffe Terrace (139.9p, 144.9p)

4. Longniddry Garage, 17 Main Street, Longniddry (138p, 142p)

5. Morrisons Livingston, Retail Park South, Almondvale Road, Livingston (137.9p, 145.9p)

6. John Hastie & Son, Mid Road, Prestonpans, East Lothian (137.9p, 144.9p)

7. Shell Easthouses, 2 Mayfield Rd, Dalkeith (136.9p, 143.9p)

8. Shell Dreghorn, 50 Dreghorn Link, City Bypass (135.9p, 142.9p)

9. Morrisons Gilmerton Road, Moredun (134.9p, 142.9)