Call to cut fuel tax made at Highlands and Islands Convention

Coupled with oil giant Esso's withdrawal of agency cards – which provided cheaper petrol to local businesses – Minister of State for Scotland George Foulkes was urged to act to rectify the worsening situation.

With the cheapest petrol in Orkney still ten pence a litre more than prices down south, Orkney Islands Council's convener, Councillor Hugh Halcro-Johnston questioned why the Government couldn't implement the same price throughout the country.

The common tariff obligation already relates, for example, to electricity prices which are standardised.

Commenting on Esso's controversial agency card decision, he added: "This is a unilateral decision by the oil company without any consultation. The effects on this area will be dramatic and the effects on the oil companies will be undetectable.

"It is totally unacceptable that a national corporation should behave in such a high-handed manner and I am sure there must be something our government can do about this."

Lawrence Tulloch, chairman of Shetland Islands Tourist Board urged Mr Foulkes and Deputy First Minister Jim Wallace, who was chairing Wednesday's convention, to put pressure on Esso.

"This is a serious blow to many small businesses that operate in the Highlands and Islands and particularly in the tourist industry that I am interested in," he said.

Mr Foulkes' response was that the issue was a "purely commercial matter."

But he added: "As part of our inquiries in the Western Isles the Office of Fair Trading is looking at company agency cards so perhaps we will get something on that when it comes out."

Mr Foulkes said differences in fuel prices, often between relatively short distances were probably due to turnover.

As to cutting fuel taxes, he said the income from the duties brought in money for transport developments and had to be raised by some means.

"You can't have that (investment) unless you get the money from somewhere," he said. "You either get it from fuel duties, income tax or other things.

"We know putting up taxes is not popular.