Fuel discount to start on March 1

Chief Secretary to the Treasury Danny Alexander has today (Friday) announced that from March 2012 motorists in remote island communities will benefit from a five pence a litre fuel discount from March 1 2012.

The announcement came after the Government received final EU clearance to operate its rural fuel rebate pilot scheme in the Inner & Outer Hebrides, Northern Isles, islands in the Clyde and the Isles of Scilly.

The scheme will bring much needed relief to remote islands, where pump prices are particularly high due to transportation costs.

Danny Alexander said:

“This is terrific news for island communities, which have long suffered the effects of high fuel costs. From 1 March next year, islanders will see a 5p cut in the pump price of petrol and diesel.

“As well as securing EU clearance, we have produced a scheme designed to protect the cashflow of local retailers. We have also delivered on a promise to help address the persistent unfairness of some of the lowest income communities in the country paying among the highest pump prices.

“After years of people saying this could not be done, the Government has delivered it in less than two.

“This is another example of our determination to govern for the benefit of the whole United Kingdom.” Fuel retailers on the islands will receive a 5p a litre rebate on the petrol and diesel they purchase and will be required to pass on the full saving to the customer.

To ensure that retailers suffer no cashflow problems in passing on the discount from 1 March, they will be able to claim the 5p rebate from HM Revenue & Customs (HMRC) on fuel purchased from 1 January next year.

Na H-Eileanan an Iar SNP MP Angus MacNeil has welcomed the announcement.

He said : “Fuel is one of the main issues of concern in rural areas, and while I welcome that we have a victory and a start date for this scheme. I have been arguing for this scheme for the past 5 years. The previous Labour Government did nothing to help and while I am pleased that this Coalition Government have moved, had they been nimbler the scheme could have been in place by now.

“We will still have to be wary in case of any teething problems for retailers when it starts to get going.

“The price of fuel has been rising steadily for the past two years, with it now at record levels, and the gulf in price between the Hebrides and the mainland being nearly 18p a litre. This will go some way to helping motorists, and I would hope that the Chancellor George Osborne will also scrap the proposed 3p a litre fuel duty increase that is being proposed in January 2012.

“Further, we must not forget that in July 2008, George Osborne launched plans for a ‘Fair Fuel Stabiliser’, describing it as a ‘common sense plan’. We need to see action on that area now from the Government too. As well as being common sense, it is answerable and fair for Scotland, given that we pay amongst the highest fuel prices in Europe even as Scottish oil revenues surge into the UK Exchequer.”