(1)

By letter of 16 September 2016, the United Kingdom requested authorisation to apply a reduced rate of excise duty on gas oil and unleaded petrol pursuant to Article 19 of Directive 2003/96/EC (‘the Directive’) on the islands of the Inner and Outer Hebrides, the Northern Isles, the islands in the Clyde (all off the coast of Scotland), and the Isles of Scilly (off the south west coast of England). The United Kingdom provided additional information on 16 December 2016.

(2)

In these areas, the prices of gas oil and unleaded petrol are higher than the average prices in the rest of the territory of the United Kingdom, placing local fuel consumers at a disadvantage. The price difference is due to additional per-unit costs related to the geographic location of the islands, their low population numbers and the delivery of relatively low volumes of fuel.

(3)

The tax reduction should not exceed what is necessary to compensate for the additional per-unit costs borne by the consumers in the geographical areas concerned.

(4)

The reduced excise duty rates should be above the minimum rates laid down in Article 7 of the Directive.

(5)

In view of the insular nature of the areas to which it applies and the moderate reduction in the rates, the measure should not give rise to additional driving specifically linked to the supply of motor fuel.

(6)

Consequently, the measure is acceptable from the point of view of the proper functioning of the internal market and of the need to ensure fair competition, and it is compatible with the Union's health, environment, energy and transport policies.

(7)

In light of Article 19(2) of the Directive, each authorisation granted under this Article must be strictly limited in time. In order to provide the businesses and consumers concerned with a sufficient degree of certainty, the authorisation is granted for a period of six years. This decision is without prejudice to the application of the Union rules regarding State aid,