Hitches over “unworkable” fuel discount 1/9/11
The number of petrol retailers threatening to boycott a proposed rural fuel discount scheme is forcing the Treasury to seek a mutually acceptable way of getting the initiative off the ground.
Under the method being ditched, petrol stations could wait up to two months to see the discount refunded to them by the Treasury.
Retailers say this risks putting them out of business as they struggle to meet the
upfront costs of the 5p-
It means local fuel outlets would be using their already very tight margins to effectively subsidise the government. The scheme does not take account of the varying distribution costs which could cancel out any savings from a lower pump price.
The Treasury is now considering cutting duty before the fuel leaves the wholesale distributor but it’s unclear if this would be cleared by the European Commission.
Islands’ MP Angus MacNeil MP called on Chief Secretary to the Treasury Danny Alexander, also a Highland MP, to guarantee that there would be no delay to the scheme being introduced.
Mr MacNeil said: “With fuel prices higher than ever, people in rural areas cannot afford any delay in the introduction of a discount scheme. Equally, rural filling stations cannot be left to bear the burden of Treasury delays in refunding the discount.
“This is a Treasury problem and Danny Alexander, as Chief Secretary and as a Highland MP, must step in to ensure that, firstly, the scheme is not delayed and, secondly, that businesses and jobs are not put at risk by Treasury delays.
“It is simply unacceptable that in energy-
"Coupled with the UK Government's VAT rise, these record fuel costs are putting a huge and unnecessary amount of pressure on our communities and on vital sectors of the Scottish economy, and risk choking the recovery we are building in Scotland.”
MSP Alasdair Allan said the present proposal is unworkable for all small fuel retailers.
Mr Allan commented: “Rural filling stations work under very tight cash restraints at the moment, and to expect them to have to wait two months for payment under the scheme is simply not acceptable.
“I have written to Danny Alexander about the matter and have asked him that a reasonable solution is found to make the scheme workable for suppliers, and to ensure that the fuel duty cut is implemented as soon as possible.
“Where there’s a will there’s a way and I know that a solution can be found, so that many drivers in rural areas will get the fuel discount that is much needed.”