The oil giant Shell is facing a boycott of its products by armed forces veterans after it banned poppy appeal collections at its petrol stations.

The Scottish Veterans Association will this week discuss organising an embargo in protest at the company’s refusal to allow poppies to be sold at its forecourts.

Shell Retail, which operates more than 1,000 service stations in the UK, imposed the ban because, it says, it already contributes to a number of charities, including Macmillan Cancer Support, the Rspca and Motability. A letter to the Royal Scots Regimental Association from Shirley Cinco, at Shell’s customer service centre in Manchester, said: “Rather than simply giving to worthy causes, Shell prefers to donate skills, time and knowledge as well as money. It is in the context of this strategy that Shell Retail will not be allowing any further charities, including the poppy appeal, to use its forecourt network to collect monies.”

Esso said it was up to individual station managers if they wanted to arrange poppy collections. BP, Morrisons and Tesco, which operate filling stations throughout the UK, said they were happy to endorse poppy collections on their premises.

The Royal British Legion Scotland, which organises the annual Remembrance week poppy appeal to raise money for ex-servicemen’s charities, said the ban by Shell was particularly offensive as its North Sea oil platforms had been protected by the armed forces for decades.

“All of their rigs in the North Sea are regularly patrolled by the Royal Navy and Royal Marines,” said spokesman Neil Griffiths. “I accept that no charity has an automatic right to place their collecting cans wherever they want, but it does seem strange for a company that has benefited so much from the armed forces to fail to acknowledge that.”

John Richardson of the Scottish Veterans Association said he planned to discuss the possibility of a boycott of Shell service stations with his members.

“Shell’s policy of not allowing can collections is unacceptable and we want it to change,” he said. “We will make their stance very clear to our members and they can decide whether or not they feel strongly enough to take their custom elsewhere. We feel Shell should not be sticking with a policy which many veterans will regard as disrespectful.”

Eric Joyce, the Labour MP for Falkirk and a former commissioned officer with the Black Watch, said the company’s position was out of touch with public opinion. “Given the current situation in Afghanistan it is more important than ever to support poppy week,” he said. “Shell’s refusal to allow collecting cans in their service stations is mindless and misguided and they need to think again and reverse this policy.”

Shell yesterday stood by the ban, although it has agreed to project an image of a poppy onto its corporate HQ in London to show support for the appeal.

A statement said: “In 2004 Shell UK decided to stop all charity collection boxes within retail shops following feedback from customers and retailers. Charity boxes have continued to be available at other Shell locations in the UK. In addition, Shell focuses on programmes that support science education, innovation and business skills.”

Last week Derbyshire county council reversed a ban on poppy collections at its 48 public libraries following an outcry. Officials had ruled that the authority’s equality policy meant it could not be seen to support “particular charities at the expense of others”.

Bodycare UK, the toiletries chain, was forced into a U-turn after ordering an employee in Wigan to remove her poppy. It backed down after the matter was taken up by the local MP and veterans’ groups.

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