The Government has been given clearance by the EU to give a 5p fuel discount to residents off the coast of Scotland and in the Isles of Scilly.
The discount will begin from March and fuel retailers will be obliged to pass it on, however, they will be able to claim a refund from the HM Revenue and Customs on fuel bought from January 1.
This has been designed so that retailers do not suffer any cashflow problems as a result of the pilot scheme, which will cover the Inner and Outer Hebrides, Clyde islands, the Northern Isles and Scilly.
Chief Treasury Secretary Danny Alexander said: "This is terrific news for island communities, which have long suffered the effects of high fuel costs. From March 1 next year, islanders will see a 5p cut in the pump price of petrol and diesel."
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