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Review of the Rural Petrol Stations Grant Scheme Final Report

5 SOCIAL BENEFITS

To assess the value or otherwise of the Rural Petrol Station Grant Scheme, it is important to understand the wide range of impacts that the scheme may be having. As discussed previously, for the purposes of this study, these impacts have been divided into economic, social and environmental impacts. This section looks in detail at social impacts of the scheme.

This section focuses mainly on the social impacts as felt by local residents using the petrol stations, and the local communities. Whilst visitors are an important part of the research, associated impacts are felt to be predominantly related to economic impacts, and is therefore covered in Section 6 of this report. To support this, the survey of petrol station businesses showed that there was a strong feeling that local residents (88% of responses) and businesses (56%) would be the groups most affected by the closure of the petrol station.

Potential social impacts

To begin with, we set out a range of potential social impacts of the scheme, which will then be discussed in turn using data gathered through customer and business surveys in the course of the research.

The scheme by its nature is aimed at enabling petrol stations in rural areas to remain open, where without grant assistance they may have closed, thus leaving a community or communities without a local fuel supply.

The lack of a local fuel supply could have impacts on the community in terms of:

• Cost impacts - without a local supply for private or business vehicles, individuals could have to travel further to obtain fuel, thus incurring additional cost as extra fuel may have to be purchased to travel the greater distance. This additional expenditure on fuel could have impacts on the individual, depriving them of income to spend on other areas - these other areas will include non-essential expenditure which contribute to quality of life (e.g. holidays, toiletries, leisure time) and essential expenditure such as rent or mortgages, employment related expenditure (e.g. travel to work) or education/training related expenditure, thus endangering the viability of any such activities.
• Quality of life impacts - in addition to the potential impacts caused by increased expenditure on fuel as outlined above, the lack of a local petrol station could have further impacts if the station provides other services apart from fuel, including local Post Office, magazines/newspapers, groceries, video rental and car accessories. In the absence of a local outlet of such products, the community is likely to have to travel further to obtain such items, thus incurring additional cost and inconvenience in terms of time spent, or may have to forego some items altogether, contributing to a decline in local quality of life. Again, the impacts of such a scenario will vary between individuals and households, depending on the nature of the items / services which are more difficult to access in the absence of a petrol station e.g. lack of a local Post Office service could have serious impacts on someone who is dependent on the service for receipt of benefits, or who needs the service to be able to work from home or run a local business.
• Viability of community impacts - the lack of a petrol station and associated services could have such significant impacts as to call into question the viability of aspects of a community. For example, cost impacts or lack of a local important service could influence a decision to move away from an area. Similarly, if fuel is only available at a location further away from the community, then other local services could suffer as a result, with more people doing their shopping at the local service centre at the same time as obtaining fuel. Furthermore, should impacts be so severe as to deter a local business from starting up, or to close an existing business due to rises in fuel costs, local jobs would be lost leading to higher unemployment, potentially increased levels of social inclusion in remote areas in particular, and inevitably, a further pressure on out-migration from rural areas.

Past research on the impacts of fuel price increases in rural Scotland discussed above have suggested that impacts are not uniform. Indeed, they vary depending on location, household composition, age group / stage in life cycle and income levels. Therefore, impacts of potential petrol station closure and the resulting increased mileage and expenditure related to fuel on local residents have been looked at against key categories from our survey results - age and socio-economic classification.

Evidence from the research of social impacts

The following table shows the profile of the resident and visitor population surveyed as customers of a selection of rural petrol stations.

TABLE 10 SOCIAL CHARACTERISTICS OF THE SURVEY POPULATION

The profile shows that over two-thirds of respondents were aged over 40, and a similar proportion was classified as C1, C2 socio-economic groupings. However, this may not necessarily be representative of general petrol station users.

Impacts from a lack of a local fuel outlet

Surveys of customers at petrol stations showed that local residents were the predominant users (bearing in mind the time of year may have influenced the lack of visitors in the area). It should be noted that some petrol stations reported anecdotally that almost all of their customers in the winter were locals, whilst the number of tourist customers increased significantly in the summer months, to constitute almost half of all customers.

Local people reported buying, on average, slightly more than 60% of all their fuel from the petrol station in question. Thirty percent of local people said that they buy all of their fuel from that station and a further 7% buy more than 90% of their fuel from there. This suggests that a small section of petrol station users may be highly dependent on their local fuel outlet.

When this question was analysed against the socio-economic and age grouping of respondent, it emerged that people aged over 55 tended to buy a greater proportion of their fuel at that particular petrol station than other age groups - 73% stated they bought more than 75% of the fuel from that station. The youngest age group, aged 18 to 25, were least dependent on that particular fuel source, with only 29% buying more than 75% of fuel there.

TABLE 11 PROPORTION OF RESPONDENTS IN AGE AND OCCUPATION CATEGORIES AGAINST PROPORTION OF FUEL PURCHASED AT SURVEY SITE

When the reasons were given for choosing a specific petrol station, proximity to home was the most popular response (31% of responses).

Local resident respondents were asked about their car mileage over the course of a year. When the different groupings are taken into account, it would appear that those in DE tend to travel lesser distances (29% travel 15,000 miles or more a year), compared to the other 3 occupational classifications, where on average 37% travel 15,000 miles a year or more. When age is taken into account, those aged over 55 travel the least, with only 22% travelling 15,000 miles or more, and those aged 40-55 travelling the most, with 52% travelling 15,000 miles or more.

TABLE 12 ANNUAL MILEAGE BY SOCIO-ECONOMIC GROUPING AND AGE

% of each social classification

% of each age group

Customers were asked if they drove in relation to their paid employment or business - out of all local respondents 36% said they did drive for work. When this is related to annual mileage, the following table shows how many customers used their car for work or business, it can be seen that those with a higher annual mileage are more likely to drive to work.

TABLE 13 ANNUAL MILEAGE AND DRIVING FOR WORK

The survey of customers at petrol stations found that some of the key impacts from the lack of a local fuel outlet, were it to cease, were related to having to travel further to purchase fuel, having to spend more time buying fuel, and associated increase in costs of buying fuel. When asked about the impacts of closure of the local fuel outlet on local residents, cost/distance/time factors accounted for 69% of the responses, as shown in the following table.

TABLE 14 EFFECTS OF CLOSURE ON RESIDENTS

When asked about potential impacts on the community of the closure of the local fuel outlet, having to travel further to purchase fuel was the most frequently cited response, as shown in Table 15.

TABLE 15 EFFECTS OF CLOSURE ON COMMUNITY

The actual impacts of having to travel further could potentially differ depending on the individual. Respondents saying that they would have to drive further were asked how many additional miles they would have had to drive. The average distance stated was 26 miles, although distances given varied from less than 1 additional mile to 70. We have estimated (see next section) that residents would on average have to travel an additional 700 miles per person per year, were the petrol station they used to close.

The AA calculates that for a petrol car worth less than 10,000, the average running cost per mile in terms of petrol is 7.95p ¹². This means that on average, the additional mileage per annum would cost a local resident 56. As discussed above, gross weekly pay in rural areas in Scotland tends to be lower than the national average, and can vary significantly amongst social groups e.g. young people earning wages were found to have a monthly net income of 576 ¹³ in Callander.

Depending on income levels, this could be particularly significant for those on low incomes. Research shows that rural Scotland suffers particularly from a low income differential compared to urban areas, as shown in Table 3 above. For a full time worker in the Skye and Lochalsh LEC area, earning a net annual income of 13,000, an additional 56 per year is equivalent to nearly 0.5% of disposable income. However, whilst for a young person earning an annual net income of 7,000, it would account for nearly 1%. Average wages will however vary considerably amongst individuals and so, for some, the proportional cost implications will be much greater than these figures. It is also important to note that these estimates are based on the cost of closure of the average rural petrol station. Costs to individuals will be greater where the distance to the next nearest petrol station is greater than the average.

The customer survey showed that cost of fuel is already a major issue in rural and remote rural areas, with 76% of responses stating a desire for cheaper fuel when asked how the fuel supply network could be improved. Any additional costs incurred by lack of a local fuel supply could therefore have significant impacts on individuals who already feel the fuel cost differential in rural areas. Recent research carried out by Steer Davies Gleave for HIE on affordability of travel to work and education in the Highlands and Islands showed that the cost of travel was one of the most important factors influencing a decision amongst jobseekers in applying for or taking a job. The cost of travel was seen to be a particularly important factor amongst job seekers and employees on low incomes.

The customer survey asked those individuals that drive during the course of work whether the closure of the petrol station would have an impact on their employer or business - 52% of respondents to that question said that it would, compared to 42% who said it would not (6% did not know). Furthermore, when asked what the effects on business would be, 85% of responses were related to increased cost, time and distance impacts.

When the question of whether the closure would have an impact on business or employment is related to annual mileage, it would appear that people travelling lower mileages would be more affected than those driving further. Forty-seven percent of those who said it would affect their employment or business travelled annual mileages of 15,000 or under, compared to 38% travelling this distance that said it would not affect them. This seems to suggest that those travelling longer distances would be least affected, logically through increased choice of an alternative fuel source than those driving less. Analysis above has suggested that those travelling higher mileages are more likely to be driving for work, and in higher socio-economic groupings.

TABLE 16 BUSINESS / EMPLOYMENT IMPACTS IF CLOSURE

Similarly, when local customers were asked if they ever made trips specifically to purchase fuel, whilst 70% said they would not, the data suggests that those travelling lower annual mileages are marginally more likely to make a specific journey out to purchase fuel - 67% of those making specific journeys to purchase fuel travelled 15,000 miles or less, compared to 63% travelling the same mileage who said they would not make a specific journey.

Impacts from a lack of non-fuel services

Results from the survey of a sample of petrol stations showed that the overwhelming majority provided additional non-fuel services and purchase opportunities, as shown in the following table. It should be noted that many businesses offer a variety of these services.

TABLE 17 SERVICES OFFERED IN ADDITION TO SALE OF FUEL

The 'other' category included many different services, but each offered only at a small number of locations. These services included taxi or bus service provision, car hire, DIY or other specialist supplies and video hire.

A key finding from the research was that despite the fact that all those who took part in the customer survey were car drivers, over half had not purchased fuel on that particular visit to the petrol station - only 46% of respondents had purchased fuel, with the rest making other purchases or using other available services. This proportion buying fuel did not vary significantly between visitors and local residents - 46% of both locals and visitors bought fuel.

Significantly, as many people purchased groceries as fuel on their visit to the service station and 23% of respondents purchased newspapers/magazines. Other non-fuel purchases made by locals were Post Office related goods (8%), confectionary (5%), and other purchases including phonecards, tobacco and car accessories. A third of customers made multiple purchases at the petrol stations.

Furthermore, when asked why they had chosen a particular petrol station, the availability of groceries/other items/services needed was the second most frequently cited response (22%) after proximity to home.

However, if the petrol station and its associated services were not available in a particular community, it is important to understand who would have alternative sources of these non-fuel services/goods, and what impacts accessing these alternative sources would have on the individual.

When asked whether the particular petrol station was the main source for their non-fuel purchase, 82% of those making Post Office related purchases stated it as their main source, 70% said it was the main source for groceries and 50% for magazines/newspapers purchases. This suggests that for some services the petrol station was extremely important, particularly when considering that some purchases may not be available from other outlets in the local community e.g. some Post Office services. Similarly, when asked if they would continue to buy the non-fuel purchases if fuel sales ceased, Post Office services continued to be important, with 65% saying they would use this service as frequently in the absence of fuel sales, 58% saying they would purchase magazines and newspapers as frequently, and 54% buying groceries as frequently. This suggests that for well over half of local customers, the petrol station in question would continue to be a key outlet for purchases, even if fuel sales ceased.

When this is looked at against the age group of service users, it is clear that individuals within the older age categories were more dependent on the petrol station as a supplier of groceries and Post Office services in particular than younger people. Excluding those responses which stated the service was not available at that source, 64% of those aged 55 and over cited their local petrol station as the main source for groceries, compared to 27% of those aged 18-25, and 44% of those aged 25 to 55. The Post Office was reinforced as an even more important service where available for the community as a whole, but particularly for elderly people. Eighty-one percent of local people overall cited the Post Office at the petrol station as their main source where it was available, but 92% of those aged 55 and over saying it was their main source.

TABLE 18 LOCAL POPULATION DEPENDENT ON GROCERIES AND POST OFFICE AT THE SERVICE STATION

When asked if they would come to the site to use services if they could not purchase fuel, 65% of those where the service was available said they would come as frequently to use the Post Office, and within this group, 76% of those aged 55 and over said they would come as frequently. Fifty-five percent said they would use the groceries service as frequently in the absence of a fuel supply, which masks 72% of those aged 55 and over who would come as frequently.

The loss of local services related to the fuel station was shown to be an issue, with 23% of responses from local residents stating this as a key concern (see table above). Evidently, this would be a particular concern to some local residents who are dependent on the service as their main source, particularly those in the older age categories. The Post Office overall however is particularly important to the wider community where available.

Similarly, local people were asked if the closure of the petrol station would have any effect on the local community. No respondents said that there would be no effect (although 3% did not know). The expected effects were asked for, and loss of local services was the second most important impact as perceived by residents, as shown above.

Social impacts include loss of employment locally should the petrol station close. Petrol station businesses that responded to our survey employed an average of 7.5 people in all activities undertaken from the petrol stations site and we have estimated that the closure of a petrol station would lead directly to the loss of 4 FTE jobs. The calculations underlying this estimate and employment effects are considered further in section 6.

Summary

Rural petrol stations in general, including those funded by RPSGS, provide an important local fuel service to communities and visitors alike. Local residents in particular benefit from the fuel service, and the ancillary services provided at the petrol stations.

It is clear that customers feel that, were a rural petrol station to close, they would suffer as a result. The most frequently mentioned impact having to travel longer distances to purchase fuel, which could have associated (financial and time) cost implications to the individual. Clearly, these impacts would vary according to the choices available to the individual, and their financial position which would influence whether they would be able to absorb any increased cost. However, there is a section of the community which might suffer more than others - people aged 55 and over, who are more likely to travel lesser distances annually, would feel the impact of the closure of the station more than those who travel longer distances, and who are more likely to be driving in association with work. The latter may have more alternatives to those whose activity is predominantly local, be it work or non-work activity.

Similarly, those on lower incomes may feel the impact of increased costs associated with having to travel longer distances to purchase fuel. Such costs are likely to form a greater proportion of their overall income, which varies across rural Scotland, but in general tends to be lower than in urban areas.

Perhaps most significant are the potential disbenefits of the loss of ancillary services provided by the petrol station. Almost a half of customers surveyed had not purchased fuel, suggesting the other activities present, in particular groceries, newspapers/magazines, and Post Office, are being well used. Whilst we do not know what alternatives people would have were these services to discontinue, we do know that some customers are more dependent on these services than others. The retention of such services is an important policy objective of the Scottish Executive, and contribute to overall quality of life and social inclusion.

The decline of such rural services, in particular Post Offices, has been the subject of much discussion over recent years. Evidence exists to suggest that over time, individuals may change their lifestyles in reaction to increased costs (e.g. fuel price increases), and potentially to loss of services, access to opportunity and deteriorating quality of life. These lifestyle changes could include changing job, and changing residential location. Such a story is common across remote areas in Scotland, where out-migration levels have been high for many years, with many areas still losing population (e.g. Eilean Siar). Some people however do not have the choice of moving, particularly the frail elderly and those on low incomes, leading to increased levels of rural social exclusion.

It should be noted that all of the above analysis refers to the closure of a typical rural petrol station and assumes that alternative fuel provision is available within some reasonable drive distance and time. For those islands, however, where there is only one petrol station available, the above conclusions do not necessarily hold. If access to fuel requires an expensive and time consuming ferry journey, the costs incurred will be substantial and are likely to be so great as to cause fundamental changes to the structure of the community and likely to contribute substantially to population decline. In these circumstances, therefore, the social benefits of petrol station retention are such that it is easy to justify.

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