17 January 2012 Last updated at 11:29 ET

OFT to probe Western Isles' fuel prices

Fuel prices and supply on the Western Isles are to be investigated by the Office of Fair Trading (OFT).

SNP MP Angus MacNeil had raised concerns about high costs and a lack of competition in the supply of fuel with Scottish Secretary Michael Moore.

Mr MacNeil said he had received an assurance from Mr Moore that the issues would be reviewed by the watchdog.

Last year, the UK government confirmed a motor fuel duty discount pilot scheme for the isles would start on 1 March.

A prior government announcement on plans to introduce the scheme was followed by price rises at some garages on the Western Isles.

The 5p per litre tax discount scheme will apply to the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly.

In November, the Treasury said fuel retailers would receive a 5p a litre rebate on the petrol and diesel they purchase and would be required to pass on the full saving to the customer.

It said to ensure retailers suffered no cash flow problems in passing on the discount from 1 March, they would be able to claim the 5p rebate from HM Revenue and Customs on fuel purchased from 1 January.