Petrol stations face crippling burden to run fuel cut scheme 21/7/11
Small fuel retailers in the Western Isles face an expensive mountain of red tape to administer the forthcoming 5 pence cut in duty.
Though scheme has been delayed and now seems unlikely to be implemented until around the end of the year, island petrol stations are being given information on how it will work.
Chief Secretary to Treasury Danny Alexander, who will fly into Lewis this afternoon, says there will be no formal announcement on the fuel duty because it still requires to be ratified by the EU.
However, Hebrides News has learnt the Treasury is consulting on how the scheme would operate.
Every petrol station in the Western Isles is being approached over a proposal which could mean them bearing the cost of the scheme for about two months.
Under the plans, the government would create a cash flow difficulties for retailers. The duty cut would not be passed at the point of sale. But they will be forced to discount their pump prices and subsidise the scheme until the treasury repays them, which could take over eight weeks.
Retailers have until next month to respond to the claim-
An industry source told Hebrides News the idea was far too cumbersome and grossly unfair against the small struggling island fuel retailers.
The insider highlighted it would be easier and better to apply the duty cut when the ship is loaded at the refinery.
The oil tanker only carries fuel for the Hebrides, Shetland and Orkney which will all be covered by the scheme.
Thus the duty cut could be applied to the entire oil cargo in one swoop with minimum administration.
This system already exists for some fishing vessels.
MP Angus B MacNeil said: “Whilst he is in the islands Mr Alexander should take note of the price of fuel, with the average price of unleaded at 144.9p and diesel at 149.9p.
“I am calling on Mr Alexander to update us on when an announcement will be made on the Rural Fuel Derogation, the whole process is taking far too long meanwhile families and businesses continue to struggle with fuel costs.
“Also Mr Alexander should ensure that small retailers are not bearing the brunt of the costs of implementing the scheme as some have told me that they have to give a discount and then get the money back from the government a month later.
“That will create cash flow problems for small businesses and no government should want to endanger the existence of rural filling stations.”
It is understood the EU has given its approval in-
The senior Lib Dem politician will be in Stornoway to open the new James Street offices
of the Hi-