Scotland getting 'ripped-off' by inflated petrol costs as oil prices slump

Brent crude, the international oil marker, slipped as low as $18.10, before recovering slightly to trade around $19.50 by mid-afternoon on Tuesday in Europe.

But consumer analysts say that falling oil prices are not being reflected in petrol pump prices across Scotland.

READ MORE: US oil prices collapse as demand falls on coronavirus worries

According to the FairFuelUK campaign, the retail average for Scotland for fuel is up to 14p a litre more expensive than it should be.

But the Petrol Retailers Association (PRA) says that the target for independent stations is just to stay open - and that cutting prices would put hundreds out of business.

The campaign says the typical average prices of fuel in Scotland are 111.7p a litre and 117.1p for diesel, while the wholesale prices of petrol stood at 87.6p and 94.8p for diesel.

"Normal retail margins should be around 10p so Scotland should be getting prices of 97.6 and 104.8 respectively not these sky high rip off retail figures," said a spokesman for FairFuelUk.

"Even before Monday's crash in oil price, UK’s fuel supply chain has dishonestly held back March’s massive wholesale falls from filling up at the pumps."

The price of US oil - which slumped to minus $37 a barrel at one point - was produced by a trading deadline and is now back to a positive figure.

But the PRA claims that up to 100 petrol stations mainly in rural areas have already had to close their doors and that that could rise tenfold if they had to cut prices.

“These petrol stations have been hit very hard by the biggest, quickest drop in demand that any of us has ever witnessed and by their own staff problems of self-isolation, family illness so it is a real struggle to keep open," ” said Brian Madderson, chairman of the PRA.

“For some of our members, this demand drop has been as much as 85% of normal volume leading to a huge cash flow crisis. "

He said 70% of income comprised government tax from fuel duty and tax.

There was a cash grant of " £25,000 available to small and medium size petrol stations but this is "swallowed by the next delivery with a tanker needing over £26,000 just to pay the tax", said Mr Madderson.

“There is speculation from some motoring organisations and lobby groups that UK fuel prices will tumble fast as a result of the historic event in North America yesterday when the value of oil moved into negative territory.

"However, with such low demand for road fuel, most petrol stations would risk their financial viability if they had to reduce prices still further. Instead of 100 closures, we could envisage 1000 closures severely disadvantaging so many of the essential frontline workers.

"The target remains to keep open and provide continuity of service."

Oil prices have weakened sharply because of a combination of oversupply and a collapse in global demand due to the decline in economic activity caused by coronavirus lockdown measures.

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