Fuel duty reduction in islands agreed by European Commission

The European Commission has agreed in principle to the UK’s bid to reduce duty on fuel in some island communities, which is expected to lead to a 5p per litre fall in prices in Shetland.

News of the derogation for the Northern Isles, the Inner and Outer Hebrides, the Clyde islands and the Isles of Scilly had been expected, but it is not yet clear when the measure will be implemented, with final approval required from European finance ministers at their next summit.

Shetland and Orkney MP and Liberal Democrat chief whip Alistair Carmichael, who has long campaigned for a reduction in fuel duty, said: “This is the single most important step on the road towards reducing the cost of petrol and diesel in the isles.

“I am delighted that we have got this consent and hope that the remaining hoops will be a formality to jump through. This is Liberal Democrats delivering in government what they promised in opposition.”

Tavish Scott and Liam McArthur, Liberal Democrat MSPs for Shetland and Orkney, also welcomed the news.

Mr Scott said: “Last week, Shetland motorists endured a 4p rise in one day at some Island petrol stations. The difference between us and the mainland of Scotland is 20p.

“Alistair Carmichael deserves credit for pushing this derogation so hard in the UK government and it will help.

“Shetland also needs a full inquiry into the monopoly that GB Fuels operates and the consequences of that on local prices. That is the next stage, and we need that action which recognises that the car is a necessity of life not a luxury in the Northern Isles.”

Mr McArthur added: “This is another step forward in the fight for fairer fuel prices for people living in Orkney, made possible because of Liberal Democrats in coalition. We now need to see the European Council approve these plans at the earliest opportunity so that hard pressed motorists in Orkney can start seeing a welcome difference in cost, at the pump.”

The news was also welcomed by the Road Haulage Association.

“The proposal of a rural fuel duty rebate scheme of a 5p per litre duty discount comes as good news for hard pressed hauliers across Scotland,” said RHA director Phil Flanders. “However, this will only be seen as the first step. Island communities have been and continue to be particularly hard hit by the rising cost of transporting goods essential for day to day living. The extent of any scheme will need to be looked at both urgently and closely.

“There are numerous areas on the Scottish mainland which are very remote in terms of freight journeys; Ardnamurchan and the Mull of Kintyre for example. Pump prices in these areas are particularly high compared to central areas because of the high transport and distribution costs.

“A 5p per litre duty discount will go some way to helping ease the financial burden in these areas but more must be done. Yes, these proposals are a start, but there is still a very long way to go.”

A spokesman for the Treasury said: “The European Commission decision is a positive step towards delivering cheaper fuel to remote island communities. The UK government is working to secure the final agreement of member states and get savings at the pump as quickly as possible.”