Extending fuel rebate
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could prove difficult
INDUSTRY campaigners have warned that plans to extend the rural fuel rebate scheme to areas of mainland Britain may be "fraught with difficulty".
Last week, Treasury chief secretary Danny Alexander announced a consultation on extending the rebate scheme — under which fuel retailers in remote areas, such as the Inner and Outer Hebrides, can claim 5ppl back on the price of fuel, on condition that they pass the savings on to consumers — to other remote areas of the UK where pump prices tend to be high. Nearly 1,500 fuel retailers in 36 counties and districts in England, Wales, Scotland and Northern Ireland are being consulted, although other areas may also be
included. Any expansion of the scheme will require approval from the European Commission, which the government will start seeking this autumn.
The proposal has received a warm welcome from fuel price campaigners, retailers, and trade bodies, but some have started to question how a scheme that effectively reduces pump prices in some areas but not others can be fair. Treasury officials have also made
clear that the precise value of rebate available in any extension has yet to be determined. Howard Cox, co-founder of campaign group FairFuelUK (1,1,UK), said he couldn't see how the scheme might work without distorting the market. "If a garage in one place is selling fuel for 5ppl or 6ppl less than one a few miles away, it must be unfair. It's going to cause resentment and affect businesses," he said. "It will be fraught
with difficulty," agreed Freight Transport Association (FTA) director of policy and communications James Hookham.
"We already have a land mass where two different rates of fuel duty apply in Northern Ireland and the Republic, and look [at] what happens there," he added.
The Road Haulage Association, FTA and1,I,UK have all suggested a nationwide cut in fuel duty would be preferable.
Hookham said the plan to extend the rural rebate was "clear recognition that the government accepts the need for a cut in fuel duty", adding: "This should not be introduced purely in rural areas, but across the country."