Argyll and Bute Council officers monitoring fuel costs after prices soared by 40%

Council officers are monitoring the cost of fuel in Argyll and Bute after prices increased by as much as 40% in a month.

A report has been published on the potential impact on the council of the conflict in Iran, including the increasing cost of vehicle fuel.

The authority is making use of the existing Scottish procurement framework to fuel its vehicles until March 2027, but clarity is being sought on whether there is any further cost.

The details feature in a report which will go before the council’s policy and resources committee at its meeting on Thursday, May 21.

Executive director Kirsty Flanagan said: “The UK and Scottish Governments do not anticipate any disruptions to the supply of petrol and diesel at this time, as all scheduled deliveries to the UK remain on course.

“Despite stable supply conditions, retail fuel prices have increased significantly in response to sharp rises in oil prices driven by the ongoing conflict.

“In March 2026, petrol prices increased by approximately 20%, while diesel experienced a 40% surge.

“Following discussions with the procurement Team, it has been determined that the council is utilising the existing Scottish procurement framework for liquid fuels, ensuring price stability until March 31, 2027.

“However, clarification is needed regarding whether the fixed price applies to the entire fuel cost, and further analysis will be undertaken to address this aspect.”

Ms Flanagan added: “The principal consequence of escalating fuel costs is anticipated to impact employees who use personal vehicles for work-related activities.

“As fuel prices exceed the established mileage reimbursement rates, concerns regarding allowances may arise, potentially resulting in risks to both workforce stability and service provision.

“The council’s current reimbursement rate for casual mileage, which applies to most staff utilising their own vehicles, aligns with the HMRC allowance for business mileage payments.

“At present, HMRC has not indicated any increase in the tax-free allowance for mileage expenses; nevertheless, this will continue to be monitored closely.”