Rural Fuel Duty Relief scheme
The Rural Fuel Duty relief scheme has cut fuel duty in remote island communities by 5p per litre. The scheme applies to unleaded petrol, diesel, biodiesel, bioblend and bioethanol blend sold in the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde and the Isles of Scilly. Consumers in these areas have benefitted from the reduced fuel duty since March 2012.
The Government recently announced that it is seeking to extend the island fuel rebate scheme to include other remote rural areas of the UK with higher fuel costs. Ten new areas were identified in October 2013 and a further seven areas were published in January 2014. Most of these rural areas are in Scotland but there are also areas covered in Northumberland, Cumbria and Devon.
As any discount on the standard rate of fuel duty requires a derogation from the EU Energy Tax Directive, the Government will need permission from the European Commission for the extension of the scheme.
The Government has now submitted an application to the European Commission and a final decision is expected later this year. If all the areas receive approval, around 125,000 people will benefit from the scheme across the UK.