Rural fuel price cut gets green light

HM Treasury

March 5
15:00 2015

Residents across 17 of the UKs most rural areas with the highest fuel prices are to benefit from a 5 pence per litre fuel price cut from 31 May, with retailers able to register for the scheme from 1 April, Chief Secretary to the Treasury Danny Alexander has announced.

The Rural Fuel Rebate has been approved by the European Union (EU) following a year-long approval process spearheaded by the Chief Secretary, having received Commission approval in January. This is the first time ever that the EU has approved a fuel discount on the UK mainland, as the UKs most rural islands already receive this discount.

The scheme will allow 125,000 people living in the selected areas, who currently face some of the highest fuel prices in the country despite depending on cars for transport, to benefit from cheaper fuel.

Danny Alexander, The Chief Secretary to the Treasury said:

Thanks to my action in government, motorists across some of the UKs most remote rural areas will now benefit from a fuel discount. I have made introducing the Rural Fuel Rebate a top priority because I know from my own experience that cars are a necessity, not a luxury, for people living in remote communities and that petrol in these areas is far more expensive than the rest of the UK.

People will see lower prices from the end of May, with filling stations in the 17 selected areas able to register for the scheme from 1 April. Combined with the current fall in oil prices and the freeze in fuel duty rates nationwide, this 5p discount on fuel prices will provide a much-needed boost to families who face the highest fuel prices.

The 17 areas which will benefit from the price cut are:

  • IV54 (Highland Scotland)
  • IV26 (Highland Scotland)
  • IV27 (Highland Scotland)
  • NE48 (Northumberland England)
  • PH41 (Highland Scotland)
  • KW12 (Highland Scotland)
  • PA80 (Argyll and Bute Scotland)
  • PH36 (Highland Scotland)
  • IV22 (Highland Scotland)
  • PA38 (Argyll and Bute Scotland)
  • PH23 (Highland Scotland)
  • PH19 (Highland Scotland)
  • IV21 (Highland Scotland)
  • LA17 (Cumbria England)
  • EX35 (Devon England)
  • IV14 (Highland Scotland)
  • Hawes (North Yorkshire England)

Retailers of road fuel within these geographical areas will be eligible to register with HMRC and to claim back a 5 pence per litre duty relief on purchases of unleaded petrol and diesel for retail sale within the eligible areas. They will be entitled to claim the relief from HMRC on a monthly basis. Full instructions for retailers in selected areas can be found on the HMRC website.

These areas have been selected using the following criteria:

  • 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 over 100 miles by road from the nearest refinery
  • Population Density: The population density must be no higher than any area in the current scheme

Areas that did not adequately fulfil these criteria were not included in the application, as the government considered them to be unlikely to receive approval from the EU.

The current rural fuel rebate scheme came into effect in March 2012 and allows retailers of road fuel within the Inner and Outer Hebrides, the Northern Isles, the Islands of the Clyde and the Isles of Scilly to register with HM Revenue & Customs (HMRC) to claim back a 5 pence per litre relief on unleaded petrol and diesel for retail sale within the eligible areas.

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