There has been a lot of talk in the media about filling stations failing to pass on the 5p reduction of tax paid on a litre of unleaded petrol and diesel which equates to 6p per litre when the corresponding reduction of 20% VAT i taken in account.
I have had first hand dealings of the 5p reduction of petrol and diesel prices.
Filling stations in rural parts of Scotland plus the Inner and Outer Hebrides have had a 5p reduction in the price of a litre of petrol and diesel for from memory the past ten years.
In theory it is should work but in practice it does not because it is up to the owners of the filling stations to claim back the 5p per litre of petrol and diesel sold.
This system is wide open to abuse as there is nothing to stop the owner of a filling station increasing the price of petrol and diesel by 5p per litre than necessary, then reduce it by 5p and claim 5p per litre of unleaded petrol and diesel sold from the Scottish Government. A win win for the owner of the filling station.
The filling stations in Islay do not have large signs advertising the price of their unleaded petrol and diesel on sale at their pumps which means that a vehicle driver only discovers the price when they stop their vehicle at the pumps.
In my opinion vehicle drivers in the rural parts of Scotland should be given a receipt every time they purchase unleaded petrol and diesel and they can claim back their 5p per litre purchased from the Scottish Government once every six months.
Not everyone has to fill out an annual tax return.
We are talking about two different petrol and diesel price deduction schemes.
The U.K. wide one is a 5p deduction in the price of duty paid on petrol and diesel which results in a total price reduction of 6p including a 1p reduction in the 20% Vat paid.
The reduction in the price of petrol and diesel in the rural parts of Scotland plus the inner and outer Hebrides is a Scottish Government scheme which was supposed to cut the price of petrol and diesel in these remote places resulting in a 5p reduction in the pump price.
However this can never be officially passed on to the motorist until the U.K. Government sets an official price for the sale of petrol and diesel throughout the U.K.