Fuel prices to be cut in rural areas if Europe gives go-ahead

The 'island fuel rebate' which saves drivers 5p a litre off Scottish coast and on Scilly Isles could be rolled out across UK

Fuel prices could be cut by 5p a litre in rural areas if Europe accepts Danny Alexander proposals (EPA)

The Government has proposed a cut in fuel duty for those living in remote and rural areas.

Under current rules, islanders off the coast of Scotland and at Scilly get a 5p discount to compensate for the fact that the cost of transporting fuel there means prices are much higher.

Chief Secretary to the Treasury Danny Alexander said he wanted to roll out this “island fuel rebate” to other remote parts of the UK, but warned that he would first need to get permission from the European Commission.

He has called for fuel retailers in areas such as Devon, Aberdeenshire, Northumberland and Powys to send in details of how much they charge for petrol, and warned that prices must be consistently high across a region before permission to cut duty would be granted.

Mr Alexander said: “The island fuel rebate provides much needed help to keep down fuel prices in areas where costs of transporting fuel mean prices are much higher. I know that there are other remote rural areas of the UK with similarly high fuel costs.

”So we are today starting to gather further evidence that will form part of an application to the Commission to extend the island fuel duty discount scheme to very remote rural areas.

“As a Highlander, I know that for people who live in rural areas driving is not a choice, but a necessity. So while it won't be easy to get this agreed with the Commission, I want to do everything I can to make this happen.”

Campaign group FairFuelUK said the consultation was a good thing but called for it to be rolled out for the whole of Britain.

Quentin Willson, FairFuelUK spokesman said: “I welcome the Treasury's acknowledgement that the UK needs a duty cut, but we need it across the country, not just for remote communities. Everybody is hurting not just the few.”

Nearly 1,500 retailers in 35 counties and districts in England, Wales, Scotland and Northern Ireland are being consulted.

Areas where fuel prices could be cut:

• England - Cumbria, Devon, Herefordshire, North Yorkshire, Northumberland.
• Wales - Gwynedd, Isle of Anglesey, Monmouthshire, Powys.
• Scotland - Aberdeenshire, Angus, Argyll and Bute, Dumfries and Galloway, Highland, Moray, Perth and Kinross, Scottish Borders, South Ayrshire.
• Northern Ireland - Antrim, Armagh, Ballymena, Ballymoney, Banbridge, Coleraine, Cookston, Down, Dungannon, Fermanagh, Larne, Limavady, Magherafelt, Moyle, Newry and Mourne, Omagh, Strabane.