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Isles fuel price cut from March 2012, Treasury says

Category: Scotland

Published: 25th Nov 2011 11:15:25

A motor fuel duty discount pilot scheme for remote island communities will start from March 2012, the UK government has confirmed.

The Treasury said it would apply to the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly.

The 5p per litre tax discount will apply to fuel consumed on the islands.

Chief Secretary to the Treasury Danny Alexander said it was "terrific news" for island communities.

The Treasury said fuel retailers would receive a 5p a litre rebate on the petrol and diesel they purchase and would be required to pass on the full saving to the customer.

It said to ensure retailers suffered no cash flow problems in passing on the discount from 1 March, they would be able to claim the 5p rebate from HM Revenue and Customs on fuel purchased from 1 January next year.

The announcement came after the UK government received final European Union (EU) clearance to operate its rural fuel rebate pilot scheme for islands.

Mr Alexander said isles communities had suffered the effects of high fuel costs.

He said: "As well as securing EU clearance, we have produced a scheme designed to protect the cash flow 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."

Mr Alexander added: "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."

Draft legislation for the pilot scheme will be published on the HMRC website.

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BBC News, 2011. Isles fuel price cut from March 2012, Treasury says [Online] (Updated 25th Nov 2011)
Available at: http://www.ukwirednews.com/news/205392/Isles-fuel-price-cut-from-March-2012-Treasury-says [Accessed 31st Jul 2014]

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