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The truths they don't want you to read....

Monday, August 01, 2011

Fuel prices and a derogation

Is anyone really surprised that the planned 5p reduction in fuel duty comes with a huge admin burden attached?

This modest proposal - and it is very modest - is best with practical problems which will undermine it's effectiveness from day 1.

It should not be delivered by cutting 5p off the delivery cost onto the islands, when it leaves the tanker.  Regardless of all the proprieties, there is going to be a perception that the 5p is going into the Scottish Fuels profits, rather than to the public.  By dropping individual pump prices, there is an assumption that competition will keep prices low.

But how to bridge the cash flow issues?

Simple.  No honestly, it is simple.  Transport Scotland currently manages the Bus Service Operators Grant whereby duty is refunded to bus operators.  Expand that scheme to cover petrol stations, and as at present, make payments to account, before having a square-up at the end of the year when certified claims are submitted.

It's not ideal, because the 5p + VAT cut will be reduced by the costs for making and certifying claims (more work for accountants!) but it is probably the most efficient way to process the claims.

After all, as our MP says:
"...families and businesses continue to struggle with fuel costs."
So hopefully he has approached  the Scottish Government to ask them to match the cut by providing an equal subsidy to help the islands - I'm sure that someone can confirm this - as that would be the least we could expect if he isn't just making political points.

1 comment:

Anonymous said...

There is no doubt something needs to be done and fast. 5p though a step in the right direction is really not enough. Looking at the prices acros the UK we can see we have to pay about 15p per litre more than the average (That's almost 70p per gallon in old money!!!). The max figures show at least in Stornoway the price is the highest in UK, but I suspect someone in Hartis or the Uists may confirm even higher prices there.

UK Petrol Prices for
Thursday 4th Aug 2011
Avg. Min. Max.
Unlead: 136.59p 130.9p 149.9p
Diesel: 140.79p 135.9p 154.9p
LRP: 141.26p 134.9p 148.9p
Super: 143.94p 134.9p 160.0p
LPG: 75.93p 67.9p 84.9p

The UK government is the only body that can do anything about this, but since nobody in Scotland votes for them anymore they may no have any will to lift a finger, except perhaps the middle one.