The European Commission (EC) has approved UK government plans for a rural fuel rebate scheme that would see 17 of the UK’s most rural communities benefitting from fuel price cuts of up to 5 pence per litre.

Chief Secretary to the Treasury Danny Alexander said that gaining the EC’s approval on the matter constitutes ‘clearing a major hurdle’.

The government is now looking to move forward immediately with formal consultations regarding the regulations necessary to implement the change.

Duty relief

The rebate scheme will allow 125,000 people living in selected areas of the UK to benefit from cheaper fuel – the impetus being that residents in rural communities currently face some of the highest fuel prices in the country despite being the most heavily dependent on cars for transport.

Retailers of road fuel within these areas will be eligible to claim back up to 5 pence per litre duty relief on purchases of unleaded petrol and diesel.

A rebate scheme of this sort is already in place for residents of the UK’s most remote islands, but this marks the first time the EC has approved a fuel discount on the mainland in the UK.

The current rural fuel rebate scheme, which came into effect in March 2012, covers retailers of road fuel within the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly.

Benefitted areas

The 17 new areas cited in the government’s EC application were:

IV54 (Highland – Scotland)

IV26 (Highland – Scotland)

IV27 (Highland – Scotland)

NE48 (Northumberland – England)

PH41 (Highland – Scotland)

KW12 (Highland – Scotland)

PA80 (Argyll and Bute – Scotland)

PH36 (Highland – Scotland)

IV22 (Highland – Scotland)

PA38 (Argyll and Bute – Scotland)

PH23 (Highland – Scotland)

PH19 (Highland – Scotland)

IV21 (Highland – Scotland)

LA17 (Cumbria – England)

EX35 (Devon – England)

IV14 (Highland – Scotland)

Hawes (North Yorkshire – England)

The government provided the following criteria for picking these areas:

• Pump prices must be more expensive than the lowest pump price on the islands in the existing scheme, during the months examined.
• Areas must be over 100 miles by road from the nearest refinery.
• Population density must not be higher than that of any area in the current scheme.

“Great news for motorists”

Chief Secretary to the Treasury, Danny Alexander said:

“This is great news for motorists in these areas and brings a duty discount a step closer. Even though fuel prices are falling across the country, they are still higher in very rural areas. As someone who comes from one of the most rural areas in the UK, I know that for people who live in these areas cars are a necessity, not a luxury. I’ve fought hard to reach this major milestone.

“While we have one more stage to go, I want to make sure we are ready to implement this as a top priority so we will press for this to be heard as soon as possible and are today publishing the necessary draft regulations. I’m determined to implement the rural fuel rebate in the current Parliament as part of this government’s drive for a stronger economy and fairer society.”