THOUSANDS of people living in a remote area of the Yorkshire Dales are set to benefit from 5p a litre discount at the petrol pumps after the European Commission passed Government plans.

Motorists using four petrol stations in Wensleydale will receive the rural fuel rebate alongside others in Hexham and deeply rural areas of Devon, Cumbria and the Scottish Highlands once the move is rubber-stamped by other European nations.

The decision has come as fuel prices dropped alongside the price of oil hitting a six-year low.

The ruling follows a lengthy campaign - which also saw other communities the region, including the North York Moors and Northumberland attempt to be selected for the scheme - to prevent rural drivers paying a premium for fuel.

Politicians and rural groups lobbied the Government to help rural residents after it was revealed residents in some areas of North Yorkshire were paying more for fuel than anywhere else in the country.

Announcing the decision, Danny Alexander, chief secretary to the Treasury, said cars were a necessity rather than a luxury for people living in remote areas.

He said: "I’m determined to implement the rural fuel rebate in the current parliament as part of this Government’s drive for a stronger economy and fairer society.”

Ian Bown, who runs Dale Head Garage, in Hawes, said the decision to give the discount to the DL8 3 postcode had saved his business and the jobs of his three employees.

He said: "We are over the moon, over the past six years we've seen a 35 per cent drop in sales and business dropped more drastically this winter than ever before.

"It means we will be able to compete with petrol stations in towns like Northallerton and Darlington and I'm expecting to attract new customers from this area who have been filling up elsewhere."

Hawes-based businessman and councillor John Blackie said residents and traders alike would celebrate the decision.

He said: "So many services are going further and further away, so anything we can do to keep down the cost of fuel to enable people to reach places is good."

North Yorkshire businessman Kevin Hollinrake, the Conservative parliamentary candidate for Thirsk and Malton, said it was unfair the North York Moors had not been included.

He said he would press for a revision of the selection criteria, which includes being more than 100 miles from the nearest refinery, as the Moors had equally remote communities as Wensleydale.