THE price of fuel in a Yorkshire Dales town could fall sharply after it was selected to take part in an extension of the rural fuel rebate scheme – although other remote areas of the region are set to miss out.

Ten towns - including Hawes in Wensleydale – have been chosen by the Treasury to be put forward for a five pence per litre discount on petrol and diesel.

The European Commission (EC) will now decide whether to extend the rebate scheme already in place in isolated communities in the Isles of Scilly and Scottish islands.

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Hawes’ only filling station, Dale Head Garage, is currently selling petrol for 141.9p per litre and diesel for 146.9p.

Owner Ian Bown said he was delighted he could be be allowed to claim back the five pence per litre, admitting residents and businesses in the area had to “pay through the nose” for their fuel.

“It would be extremely beneficial to the local economy.

"At the moment we have such a small turnover that we have to charge a large margin to ensure the business is viable.

“If we got this rebate it might mean my turnover increased and we could knock 6p off rather than just 5p.”

Upper Dales county councillor John Blackie said the price cut would make life more affordable in the area and ensure the town had a sustainable fuel supply.

“It’s wonderful news. For a town like Hawes which is so rural we are increasingly finding that services that the local residents have to access from time to time are moving further and further away.

“The only way people can access these services is by car.”

While Hawes could get cheaper fuel, campaigners had hoped for other areas of the region to be selected for the scheme including remote communities elsewhere in North Yorkshire and in Northumberland.

Announcing the planned extension of the scheme, Chief Secretary to the Treasury, Danny Alexander said the the towns were judged to have met strict criteria, including exhibiting fuel pricing characteristics similar to the islands already eligible for the discount.

The other areas which could see fuel duty cut include Kirkby-in-Furness, in Cumbria, and Lynton, in Devon, as well as seven Scottish towns.

A decision is expected by the EC next year.