Friday, 4 March 2011

What's the next discount Danny?

Hats off to Danny Alexander, the Lib Dem Treasury Minister, for delivering on his own personal pledge and the coalition promise to examine the case for a fuel discount scheme for remote islands.

Alexander is confident that with European Commission approval of a 5p per litre discount scheme next month the price of filling up on Scotland's islands will become marginally more affordable.

The Chief Secretary to the Treasury, someone whose job definition is to spend less money, is letting £2m or more in fuel duty slip through his fingers to bring cheaper fuel to the islands.

Similar schemes already exist on French, Greek and Portuguese islands so the Treasury doesn't anticipate too many problems in getting all 27 EU member states to ratify the decision.

Alexander has delivered the scheme for all Scottish islands, from Shetland to the Clyde, as well as the Scilly Isles off Cornwall. The Isle of Skye, which is linked by a trunk road to the mainland, is also included in the pilot scheme.

As we've seen with other island discount schemes, no one thanks a politician for what they have just delivered but immediately the questions begin to be asked on what they will discount next?

Filling a petrol tank is at least £6 more expensive on the islands and the Alexander scheme goes about half-way to equalising the prices with mainland filling stations - if the reduction is passed on by retailers.

The Budget on March 23rd is likely to cancel the 1p rise in fuel duty that was due in April and the Treasury is still making very positive noises about the fuel duty stabiliser - a scheme that would see fuel duty decrease as tax revenues from rising oil prices increase.

Labour in office said the scheme was unpractical but as with all these things it's a case of political will, or political expediency. The SNP want to capitalise on the fuel issue in the Holyrood election but when it comes to practical solutions their fuel stabiliser scheme has been stolen by the Coalition. They are left making noise on non-starters like devolving fuel duty to the Scottish parliament.

It's early in the morning but I've already had comments from west coast mainlanders complaining about the equally high price of their petrol. If Skye is getting a discount, why not the west coast, they ask?

I suspect this is exactly the reason why Alexander insists Skye be treated as an island and included in the pilot scheme, just to highlight the anomaly of equally high prices in remote rural areas. Meanwhile, I expect the petrol station in Broadford to become just a little bit busier in the coming months.

1 comment:

  1. In my village, just 13 miles from Inverness, we pay around 5p a litre more than is charged in Inverness.
    In Beauly, equidistant from Inverness, the garage adds a *further* 5p a litre. I asked our local garage owner about this and he said retail prices are fixed by the oil companies, not the garages.
    If that's true, that's what Danny should be looking at next; the oil company tax on rural areas.
    With this drop in fuel duty, the tax payer is subsidising oil company profits.