Wait goes on for duty rebate as fuel costs remain high

The long-awaited fuel duty rebate of five pence per litre for motorists could at last be just round the corner, with Europe expected to give the derogation the nod by the end of September.

The move will provide a welcome relief for car drivers and businesses who have been forced to endure stubbornly high prices at the pumps.

But renewed calls were made this week for the Office of Fair Trading to investigate the high rates motorists have faced in garage forecourts, despite a continuing fall in oil prices as conditions in the Middle East begin to show signs of stabilising.

The question of when the rebate would be introduced has been on peoples’ lips for months. Typically motorists here face a 15 to 20 pence premium over the mainland.

Prices in Lerwick did actually drop this week by about four pence a litre, although that still leaves them just below the £1.50 per litre mark – remaining much higher than mainland prices.

Talk about the rebate began last year, when chief secretary to the Treasury Danny Alexander held preliminary discussions with Brussels bureaucrats.

But while getting the scheme approved by the European Commission is taking a long time, the only unexpected delay has been shortages in Brussels over the summer as staff have gone on their holidays.

After speaking Mr Alexander this week, isles MP Alistair Carmichael said motorists in Shetland should see the benefit of the derogation as soon as possible.

“Like everybody else in the Northern Isles, I’m appalled when I go to fill up my car at the price I have to pay.

“The current high prices reflect the high price of crude oil on the international markets. That now, however, is coming down and customers are entitled to see that reflected soon in the pump price.

“The Treasury application to charge lower rates of fuel duty here is still being pursued and as soon as the green light is given by Brussels the Treasury will publish its scheme for delivering fairer fuel prices for people in the isles.”

As well as helping to lower fuel prices in Shetland, the derogation will also provide relief for motorists in Orkney, the Hebrides, the Clyde islands and the Isles of Scilly.

Mr Carmichael’s comments came after his Holyrood counterpart, Shetland MSP Tavish Scott, renewed his calls made earlier this year for GB Oils to be brought to book over its monopoly position. The company is the sole organisation responsible for getting petrol and diesel to Shetland forecourts.

Mr Scott said a 20 per cent reduction in crude oil prices since April left no justification for the 15 pence premium drivers are still charged when they come to fill up.

He criticised the Office of Fair Trading for failing to take action as prices per litre remain persistently high.