Treasury seeks EU approval for fuel rebate expansion

23 Jan 14

The government today asked the European Union to approve plans to extend a fuel duty rebate to rural areas to seven additional locations in England and Scotland

By Richard Johnstone | 24 January 2014

The government today asked the European Union to approve plans to extend a fuel duty rebate to rural areas to seven additional locations in England and Scotland.

Last year, Chief Secretary to the Treasury Danny Alexander said he wanted to introduce a 5p per litre fuel duty reduction to ten areas, and also issued a call for evidence on whether the number of places should be expanded.

Following this process, seven new postcode areas have been included in today’s application to the European Commission – six in Scotland and one in England.

Locations have been selected following an examination of fuel prices to determine if the market exhibits similar characteristics to islands already eligible for a discount. This is based on prices being more expensive than the lowest pump price on the islands in the existing scheme, once the rebate is excluded.

A final decision by the commission on the areas in the scheme and the price discount is expected later this year. If the extension is approved, this will raise the estimated number of people eligible for the reduction to around 125,000.

‘High fuel prices in areas where cars are a necessity, not a luxury, is a major issue in rural communities across the UK,’ Alexander said.

‘So, following a supplementary call for information I’m pleased to announce that seven new areas will join the ten areas already part of our new application.

‘Reaching agreement with the commission will not be easy, but we will now get on with making that case as strongly as we can.’

The six new postal areas selected are:

IV54 (Strathcarron, Highland - Scotland)

IV26 (Ullapool, Highland - Scotland)

IV27 (Lairg, Highland – Scotland )

NE48 (Hexham, Northumberland - England)

PH41 (Mallaig, Highland - Scotland)

KW12 (Hallkirk, Highland – Scotland)

PA80 (Oban, Argyll and Bute – Scotland)

They are added to the ten areas already named:

PH36 (Acharacle, Highland – Scotland)

IV22 (Achnasheen, Highland - Scotland)