As the filling station is community owned and operated, we are keen to be open and transparent about how our pricing policy for fuel and charging works. The station is not run on a for-profit basis, but it does have to cover operating costs (including staffing) and build up a reserve against future costs such as eventual replacement of pumping equipment, large repairs, etc.
The current policy was agreed by the board of Tiree Community Enterprise Ltd, our trading subsidiary that operates the station, on December 15th 2022, following careful analysis of the projected cash flow for the station. The policy will be reviewed on a periodic basis as we develop a clearer picture of sales volumes, costs, etc.
Fuel price policy:
Diesel and Petrol prices will be based on a simple pence-per-litre mark-up against the cost to purchase the fuel and have it delivered to the station. The price at the pump also has to take account of the VAT we are required to charge (currently 20%), and is also reduced by 5p/ltr due to the Rural Fuel Duty Relief scheme.
After deducting the Duty Relief, the current mark-up is 12p/ltr on the pre-VAT price we buy the fuel.
This is higher than other operators are able to charge, but what the current operating model of the station requires to be financially viable given our location, the cost of bringing fuel over on the ferry, and the station requiring a dedicated power supply, water supply, internet connection and staffing cover.
When price changes will be applied: Pricing updates will be applied directly on the basis of fuel deliveries to the station. Three days after a delivery is received (or the next day the station is open thereafter) the price of fuels will be adjusted to match the latest delivery price, plus the mark-up. The 3 day delay is to allow for consistency, as it can sometimes take a day or two to get the invoice and this also allows for staff absence, etc.
Stocking policy: We will always be aiming to keep the tank levels as high as is practical. As soon as there is room for a full tanker delivery, we order one. Because more diesel is used, we will often take a smaller delivery of diesel only, so that price is likely to change more often. We will not be varying our purchasing timing on the basis of prevailing prices – resilience of island stocks is the priority.
EV Charger policy:
The Rapid EV charger at the station will operate at a price that is based directly on a 5% mark-up on the unit price we pay for electricity plus the payment processing fee (10%), and is also currently subject to 20% VAT under UK tax rules. Note – the price is based on the electricity used to perform the charging, not what ends up in your battery as usable charge – there are varying losses involved depending on what charging method you use, your vehicle on-board charger, battery levels and temperature.