The world prices of many commodities in particular oil are soaring, and the effect that this will have on UK, and worldwide, inflation will soon be upon us. After a lengthy period of sustained low inflation, relatively small price rises for many things over the years, we are probably about to see something very different.

Leaving aside motor fuel for a moment, there are two probable consequences of this. Firstly, that rising inflation will drive increasing demands for corresponding increases in pay, salaries and suchlike. Secondly, that on a local scale it will render the Highland Council's present council tax freeze far more difficult.

To stay within the present budget dictated by the Scottish Government settlement and the council tax freeze, the Highland Council is having to make "savings". Hence headlines in this paper over the last few months involving education and other services.

Recently it has been a trying time for our councillors, and the prospect of a similar freeze over the next two years is surely becoming more unpalatable. As rising inflation bites, so the cuts will start to threaten the sinews and bone of Highland Council services.

Returning to the cost of motor fuel, the issue was debated in the Scottish Parliament on Wednesday.

It was a high-quality debate which more or less settled round something that many of us in the North have been saying for a number of years that there should be an area-based reduction in the amount of tax levied on motor fuel in the Far North. It is allowable under EU law and it already happens in a part of France known as la France Profonde. The curious thing is that the UK Government, as part of its interaction with the EU, approves of a part of France being treated in this way, but, so far, absolutely will not countenance a similar measure for the remote Highlands.

My colleague John Thurso established this when he probed the then-chancellor, Gordon Brown, at the House of Commons Treasury Committee last year. Gordon was having none of it, and turned down flat this fuel tax proposal.

Meanwhile you only have to fill up your car to know that, while the issue has been around for years, it has never ever been as bad as this. Around 1.37 to 1.40 for a litre of diesel in much of the North, in Durness it rose this week to a jaw-dropping 1.45 per litre.

The argument has been put many times this hits everyone, and the knock-on cost of everything. And in nearly all of the North we have absolutely no choice; we rely on roads and motor vehicles. This is why one of my constituents is considering leaving his homeland and heading south.

His predicament is simple. He does a lot of miles doing Scottish Government work and while he does get reimbursed for the miles he does, the fuel price increases are rapidly eating into this income.

Worse still is his tax situation. He is presently paying income tax on his mileage, and if, in view of increasing pump prices, his employers increase the mileage allowance, then he'll pay still more tax to the chancellor. He is getting hit twice by tax. Once at the pump, and once again when he is reimbursed for his fuel and running costs. This is why he is considering moving away to an area where there is far more public transport than we have in the North. The whole thing is crazy, and very sad too.

So far the Prime Minister and the chancellor have talked about turning on the North Sea taps and increasing oil production. However, many informed people cannot see how this will make the slightest difference to the world oil price.

Oil is traded globally at global prices, and unless we were to isolate the UK from that market then it is not at all clear how increasing North Sea oil production will have any effect on pump prices. In the face of unaffordable fuel prices in the North, this talk of upping production appears to be little more than mere token tinkering.

It should also be remembered that, in parallel with forecourt prices, so too the cost of domestic heating oil has gone through the roof. And it's not just about pensioners being faced with bills they cannot afford, or the invidious decision as to whether to turn on the boiler or not, it's about many lower-income individuals and families being hit. In the sound and fury of the motor fuel debate, this point is sometimes in danger of being lost.

So it is over to the UK Government and the chancellor. They must surely heed the cries of people in the North who have no choice but to buy some of the most expensive oil and oil products in the UK, and in the world. Who knows, maybe the Durness price is right now setting a world record. That would be a truly shocking fact.

There again, it's not just about the UK Government being pressurised into action by the Scottish Parliament.

In my speech in the Scottish Parliament on Wednesday, I said that the Scottish Government should start on a workable area-based tax discount scheme for remote areas like the North Highlands.

This done, it could then be slapped on the chancellor's desk with the backing of both the Scottish Parliament and the Scottish Government.

The Scottish Government has the resources, both financially and in terms of qualified experts, to prepare such a master plan and it would demonstrate the Scottish Government's recognition that remote and economically fragile areas need special, tailor-made solutions. In this sense the jury is out on the Scottish Government as much as it is on the UK Government.

To say we wait both Governments' responses would be an understatement. We now desperately need action.

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