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Plans were approved for petrol prices to be reduced by 5p per litre to tens of thousands of people living in Devon, North Yorkshire, Cumbria and the Scottish Highlands.
The fuel rebate scheme is designed to prevent rural drivers paying a premium for fuel at the pump and was put in place following the significant falls in fuel prices across the country.
A total of 17 remote areas, covering 125,000 people, will benefit from the cuts.
Danny Alexander, the chief secretary to the Treasury, said: “This is great news for motorists in these areas and brings a duty discount a step closer. Even though fuel prices are falling across the country, they are still higher in very rural areas.”
The European Commission’s decision represents a significant milestone for the plans, which now require only the approval of other European nations in order to go ahead. However, there is concern that drivers might find it difficult to tell if the full rebate has been passed on.
Edmund King, the president of the AA, said that although the price cut would come as a great relief to people and businesses in those areas, the lack of fuel transparency means residents will have no idea if the saving has been passed on to them or not.
Simon Williams, a spokesman for the RAC, said: “We would caution that rural motorists will probably never see fuel-cost parity with urban areas.
“This is due to higher delivery costs and the fact that motorists in towns and cities tend to benefit from intense competition between supermarkets and larger independent fuel retailers, who sell greater volumes.”
The RAC also reacted to David Cameron’s comments this week regarding lowering fuel prices, stating they are unrealistic and could mislead motorists.
The motoring organisation has warned that although many retailers do pass on savings to their customers, there is no direct pattern between the drop in crude oil costs and the prices motorists pay on the forecourts.