Diesel prices exceed £2 a litre at forecourts across Scotland

The most acute instances of this price surge are concentrated in Scotland’s island and geographically isolated rural regions, where the inherent challenges of logistics and supply chains exacerbate already high fuel costs. Examples highlighted include extraordinary prices such as 238.8 pence per litre and 223 pence per litre observed in the Hebrides, with the Northern Isles also experiencing significant hikes at 209.0 pence and 208.9 pence per litre. These figures are not mere statistics; they represent an existential threat to the viability of businesses and the affordability of life in these vulnerable areas. The cost of transporting fuel to these remote locations, often involving multiple ferry crossings and extensive road networks, inevitably translates into higher pump prices, disproportionately burdening local residents and enterprises.

Norman MacAskill, a veteran haulier based in South Uist, encapsulates the dramatic shift in fuel economics over his career. He vividly recalls starting in the haulage business four decades ago, when the cost to fill a lorry’s tank was a mere 32 pence per litre. Today, that same litre of diesel costs his firm an astounding £2.22. This represents an increase of nearly 600% over forty years, a rate of inflation that few, if any, businesses can absorb without severe consequences. MacAskill’s anguish is palpable as he describes the "absolutely devastated" reaction of any haulier receiving their monthly fuel bill. He laments, "There’s no business on earth that can withstand that increase in costs." His firm, N D MacAskill & Son, plays a crucial role in the Scottish agricultural sector, transporting livestock across significant distances, including routes around Inverness, Dingwall, and Stirling. Their operations also extend further afield, undertaking vital livestock haulage from the north of Scotland down to the north of England. Such journeys, which are the backbone of the food supply chain, become financially crippling under these fuel price conditions. MacAskill asserts that these escalating costs are "a devastating cost on a fuel run on that job."

The issue, according to MacAskill, is not a recent phenomenon but a compounding problem that has been escalating for the better part of a decade. He states, "This has been going on every year for the last 10 years now. The cost of running a haulage business has just gone over the top." This long-term trend suggests deeper structural issues within the energy market, global supply dynamics, and taxation policies. The consequence of this relentless pressure is dire: "There are dozens of haulage firms that have been established 50-60 years with big numbers of lorries going to the wall." This signifies not just individual business failures but a systemic erosion of a critical industry, leading to job losses, reduced competition, and ultimately, higher prices for consumers as remaining firms are forced to pass on costs. MacAskill’s frustrated query, "When is this going to stop?" echoes the desperation felt across the sector.

The challenges are mirrored in other island communities, as highlighted by Dave Neil, who operates Sinclair Haulage, serving the Orkney islands of Sanday, Stronsay, and Eday. Neil’s business, like MacAskill’s, is an essential lifeline for these remote communities, transporting goods and services. He reports that his firm is now spending an additional £400 per week on diesel compared to before the summer months. This significant increase in operational expenditure places immense strain on the business’s margins, making it a "challenging situation" to maintain profitability and service levels. Faced with no alternative, Neil has been compelled to implement an extra fee, or surcharge, onto his customers’ costs. While acknowledging this adds to the burden on local residents and businesses, he views it as "probably the fairest way" to sustain his operations. He offers a glimmer of hope by stating that "when the fuel price drops we can take that surcharge away," illustrating the reactive and often precarious nature of operating in such a volatile market. These surcharges, however necessary for businesses, contribute directly to the rising cost of living and doing business in Scotland’s island and rural areas, creating a cycle of escalating expenses.

In response to the mounting pressure on drivers and businesses, the AA, a prominent motoring association, has actively campaigned for greater pump-price transparency. Their efforts, they claim, have successfully persuaded the UK government to introduce measures aimed at increasing visibility over fuel pricing. This initiative has led to the availability of dedicated websites and phone applications that drivers can utilise to check the latest pump prices in their vicinity, enabling them to locate cheaper fuel options and potentially mitigate some of the financial burden. While a step in the right direction, such tools offer only a partial solution to the underlying issue of high fuel costs.

The AA is also a staunch advocate for maintaining the Treasury’s existing 5 pence per litre cut in fuel duty, which was initially introduced in March 2022. They argue vehemently against any proposal to scrap this temporary relief, warning of the immediate and detrimental impact it would have on prices at the pump. Furthermore, the organisation believes there is a "good argument" for providing additional relief specifically for diesel fuel. This specific plea stems from diesel’s critical role as the primary fuel for commercial vehicles, public transport, and essential services. Unlike petrol, which is often associated with discretionary private car use, diesel powers the haulage industry, buses, delivery vans, agricultural machinery, and emergency services, making its cost a fundamental component of the national economy.

The AA highlights a crucial distinction in how businesses cope with rising diesel costs. While large corporations often possess the leverage to pass on increased expenses to their customers, frequently through a sliding scale of fuel surcharges, smaller businesses lack this automatic ability. A spokesperson for the AA underscored the plight of these often-overlooked enterprises: "These include taxi drivers, craftspeople, domestic repairs, vets, farriers and many who rely on vehicles to look after their customers." For these small, independent operators, absorbing significant fuel price increases can erode their already thin profit margins, threaten their livelihoods, and ultimately lead to reduced services or even business closures, further impacting local communities.

Addressing the concerns, the UK government has confirmed its commitment to supporting drivers and businesses. A spokesperson stated that the temporary fuel duty cut, originally implemented in response to global energy market volatility, has been extended until 31 December. This decision, they assert, is part of a broader strategy to protect British citizens and businesses from the economic fallout stemming from global geopolitical events, which have significantly disrupted international energy markets. The government spokesperson elaborated, "This means drivers benefit from the extension of the 5p fuel duty cut, with diesel 11p per litre cheaper until the end of the year than it would have been compared to plans inherited from the previous government." This statement implies that without the government’s intervention, drivers would be facing even higher prices due to pre-existing tax plans, positioning the current relief as a crucial protective measure.

However, despite these governmental measures, the reality at the pumps for many Scottish drivers and businesses remains grim. The sustained high prices for diesel, particularly above the £2 per litre mark, highlight the ongoing vulnerability of the economy to global energy fluctuations. The geographical challenges inherent to Scotland, with its vast rural areas and numerous islands, mean that the impact of these price rises is felt more acutely than in many other parts of the UK. For the hauliers, farmers, small business owners, and everyday residents, the search for affordable fuel is no longer a minor inconvenience but a critical factor determining their ability to operate, live, and thrive in an increasingly expensive landscape. The calls for further targeted relief, especially for diesel, underscore the widespread belief that more proactive and specific interventions are needed to safeguard essential services and maintain the economic viability of Scotland’s diverse communities. The continued pressure on fuel prices poses not just an economic challenge but a fundamental question about the sustainability of rural and island life in Scotland.