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Government widens Rural Fuel Rebate Scheme zone

fuel pump prices

The Government is extending its Rural Fuel Rebate Scheme to 17 of the most remote areas in Scotland and England.

The rebate, which allows retailers to receive up to a 5p per litre (ppl) fuel duty discount on unleaded petrol and diesel, has been welcomed by the fleet operator trade organisation ACFO.

The UK’s most rural islands already receive the discount, but it will be the first time that European legislators have approved a fuel discount for introduction on the mainland.

The European Commission has already approved its  introduction, but the initiative must also receive approval from other member states through the Council of the  European Union.

Chief secretary to the Treasury Danny Alexander said he was hopeful the scheme would be introduced before the May 7 general election, as part of the Government’s drive for a “stronger economy and fairer society”.

The 17 postcode areas in which the rebate will be  introduced include parts of the Scottish Highlands, Argyll and Bute, Northumberland, Cumbria, Devon and Hawes in north Yorkshire. Since 2012, the Rural Fuel Rebate Scheme has applied to the Inner and Outer Hebrides, the Northern Isles, islands in the Clyde, and the Isles of Scilly.

Tristan Campbell, fleet advisor at whisky distiller Chivas Brothers, which operates a UK-wide fleet of 260 cars and 60 vans, welcomed the move. He hoped the price cut at the pumps would be further extended to other remote areas.

The company has vehicles, notably vans, based in Speyside in the Scottish Highlands and on an island off Orkney, and expects to see savings when the fuel duty cut is passed on.

“We have vehicles that operate in some of the areas where the Rural Fuel Rebate Scheme will apply and employees who live in those areas,” said Campbell, secretary of ACFO’s Scotland and Northern Ireland region.

“The measure is very welcome. It will help not just  businesses that operate vehicles in those areas, but everyone who drives through and who lives in the rural communities. I hope the scheme can be further extended to cover a greater area of the Highlands and other remote regions.”

HM Treasury said the 17 areas were selected using set criteria, which were: pump price threshold – pump prices have to be more expensive than the lowest pump price on the islands in the existing scheme; cost of transporting fuel – areas have to be more than 100 miles by road from the nearest refinery; and population density – population density must be no higher than any area in the current scheme.

Campbell said pump prices in rural areas in Scotland could be as much as 7ppl more than in Paisley, where his office is located. Many fuel retailers in remote areas had closed in recent years and not all forecourts opened 24/7 or on Sundays. He explained: “Business and private drivers often have to drive miles to find a fuel station.”

It is acknowledged that remote rural areas have some of the highest pump prices in the country and the Government claims that expansion of the scheme would help stimulate the economies in those regions. RAC fuel spokesman Simon Williams called the development “a landmark moment for mainland rural communities”.

Fuel retailers within scheme areas must register with HM Revenue and Customs (HMRC) in order to claim back up to 5ppl fuel duty – currently 57.95ppl – on a monthly basis.

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