Government Scheme Could Cut Fuel Duty In Remote Areas
European Commission To Influence United Kingdom Fuel Duty
The Government hopes to expand a scheme that cuts fuel duty for motorists in remote areas. However, it must first receive permission from the European Commission to vary its rate – a decision that is expected at some point in 2014. The scheme has been running for some time in areas such as the Hebrides, Northern Isles, islands in the Clyde and the Isles of Scilly. The Government now wants to include Strathcarron, Ullapool, Lairg, Mallaig and Halkirk in the Highlands, Oban in Argyll and Bute, and Hexham in Northumberland. The Treasury has estimated that extending its range should benefit about 125,000 motorists.
Cost Of Fuel In Rural Areas
The Government wants to reduce fuel duty in remote areas to make prices at the pump more consistent with the rest of the county. They can, after all, be considerably higher. Why? Because the fuel suppliers – i.e. the companies that sell to the retailers – tend to charge more to deliver to parts of the world that are a long way from their refineries. That is reasonable as covering the extra mileage has cost implications in terms of wear and tear on their vehicles, consumed fuel, staff time, etc. This expense is then passed onto the motorists via the pumps. That can be a considerable financial burden, and one that is hard to sidestep as public transport in remote areas tends to be relatively sparse.
Petrol Prices, Fuel Duty And VAT
PetrolPrices.com has revealed that if a litre of standard unleaded petrol costs 129.52 pence, then 79.54 pence is tax. This incorporates 57.95 pence duty and 21.59 VAT. As such, at these prices it costs £136.00 to fill the 105-litre fuel tank of a Range Rover 5.0-litre V8 Autobiography. Of this, a staggering £83.52 is claimed by the Treasury. Plus, of course, petrol prices in remote areas can be higher than 129.52 pence. In contrast, if a litre of standard diesel costs 137.05 pence then 57.95 pence is duty and 22.84 is VAT (total tax 80.79). It therefore costs £143.90 to fill the 4.4-litre diesel version of a Range Rover. Of this, £84.83 is tax. Whereas there are lesser cars that are cheaper to run, a four-wheel-drive could be considered a necessity in parts of the country that frequently experience harsh weather. No doubt drivers in remote areas would welcome a tax break.