Why Labour inaction as Iran War sends cost of oil soaring is a huge mistake

No matter how distantly you view the current conflict in and around Iran, however – and whether or not you are interested in its devastating human cost – every one of us will feel its effects sooner or later through the soaring cost of energy.

Nowhere will spiralling oil and gas prices be felt more harshly or more urgently than in rural communities – which is why the government’s inaction on this looming crisis risks leaving rural Scots in the cold.

The rapid increases in the cost of heating oil and red diesel in the last two weeks represent a double whammy of harm to rural communities – and unlike many of the other effects of this conflict on the economy, these price rises are landing in the here and now.

READ MORE: UK Government will 'get ahead' of price rises caused by Middle East conflict as inflation rise looms

A rural inflation bomb

Gas and electricity prices, remember, are now protected by the energy price cap until the summer, so a great deal of that potential pain has been pushed into the future. People who need to buy heating oil or red diesel right now, however, are facing an inflation bomb: immediate bills that are more than double what they were just last month.

Even with the movement towards alternative heating systems over the years, heating oil remains extremely important for areas that are off the gas grid. By the same token, one of the most significant input costs for our farmers and crofters is fuel, for which there is no reasonable substitute for red diesel.

We have little choice, therefore, but to take these price hikes on the chin – unless the government takes action to shield vulnerable communities and fragile sectors of the economy from this looming harm.

This is not our first rodeo when it comes to energy price hikes. We all saw the fallout of the Russian invasion of Ukraine in 2022. It would not take a genius to imagine the economic consequences of a war on Iran (whether or not the great minds at the top of the US government had given any thought to this is another matter entirely).

Flawed scheme was better than nothing

Knowing what the consequences were last time, we surely ought to know better how to respond today.

In 2022, the previous government (after some prodding) did take action on fuel costs. For rural communities they brought forward the Alternative Fuel Payment to support families who were not on the gas grid. The AFP was massively flawed, but even a flawed scheme was better than nothing – and nothing is what we have currently from the government.

I am not married to any one solution here, whether it be tighter regulation, direct payments or a cut in VAT. If we are going to protect people from the worst harms of rising fuel prices, then the government needs to keep all options on the table. What I will not accept is that “wait and see” is good enough.

If warm words from ministers could heat homes then we would not be in this situation – but they don’t, and we are.

Alistair Carmichael is the Scottish Liberal Democrat MP for Orkney and Shetland