UK finalises rural fuel rebate proposals
HM Treasury has submitted an application to the European Commission to extend the rural fuel rebate scheme to ten towns within mainland UK, following a consultation with fuel retailers on the issue (Transport Operator, September).
The selected areas were judged by the government to meet strict criteria – such as consistently more expensive pump prices, long distances from refineries, and low population density. The EC has indicated that these will be the crucial factors in its decision, expected next year.
Most of the towns covered by the proposal fall in the Scottish Highland council area – namely, Acharacle, Achnasheen, Carrbridge, Dalwhinnie, Gairloch and Strathpeffer. The village of Appin, in Argyll & Bute, is also included – as are Hawes in North Yorkshire, Kirkby-in-Furness in Cumbria, and Lynton in Devon.
None of the council areas in Wales or Northern Ireland which had fallen under the scope of the consultation feature in the final proposals.
The scheme already allows road fuel retailers to claim back 5p per litre relief on diesel and unleaded petrol sold in the Inner and Outer Hebrides, Orkney, Shetland, the Islands of the Clyde and the Isles of Scilly.
The government had hoped to extend the scheme to as many as 36 local authority areas across all four UK nations – but the evidence gathered in during its consultation appears to have limited the scope to just five of them.
The Treasury cited analysis produced by HM Revenue & Customs, which suggested that the existing scheme has already proven successful in reducing fuel prices on the islands already covered, with pump prices consistently lower relative to the mainland.
Chief secretary to the Treasury Danny Alexander said: “We have put together the strongest possible evidence base to try and maximise the places that get it. As I’ve said before, it won’t be easy to get this agreed with the Commission, but I will do everything I can to make this happen.”
The Petrol Retailers’ Association (PRA) greeted the news with a cautious welcome. “Whilst any duty reduction will be good news for motorists in these rural areas, it does not even start to tackle the compelling evidence that rural filling stations are continuing to close for business,” said chairman Brian Madderson.
“It is also important to note that while the scheme will cut fuel prices in the nominated areas, it will only act to bring prices in line with the UK average.”
On the lack of areas covered in Northern Ireland, PRA expressed disappointment, but said it was not surprised at the result.
In an appearance before a select committee at Stormont last month, Madderson said: “I understand that interest in the scheme from NI retailers was minimal because the price threshold that the Treasury set was almost unobtainable. Therefore very few, if any [derogations], will be granted in Northern Ireland.”
