BUSINESSES have welcomed moves which could see them pay less for petrol under UK Government plans to extend a fuel rebate scheme already in place in the Scottish islands.

Chief Secretary to the Treasury Danny Alexander has launched a probe to find out how much petrol and diesel costs in the Highlands, South Ayrshire, the Scottish Borders, Argyll and Bute and Dumfries and Galloway before seeking permission from the European Commission to extend the scheme, which gives motorists a 5p per litre discount.

Transport and haulage firms say that cutting their fuel costs would be hugely beneficial and could help put them on a secure footing and safeguard jobs.

Walker Owens, director of delivery firm Oban Express, said: "Just like everybody in this day and age we struggle with costs.

"Lowering the price of fuel would be unbelievably good for us. Out business is not like the city, where deliveries can be 100 yards down the road. Our drivers can travel miles between stops."

Around 1500 retailers in 35 counties and districts in England, Wales, Scotland and Northern Ireland are being consulted, and the government plans to submit an application and evidence base in support of the scheme expansion over the autumn.

Jim Hislop, a partner at James Hislop Hauliers in Kelso, the Scottish Borders, said that helping rural firms with costs could strengthen the economy.

He said: "Fuel costs can be as much as 40% of our expenditure, so this would make a huge difference. It will make businesses more competitive as it could allow them to lower costs and that would help other firms in Scotland as a whole."

The move could also provide savings to the public purse by cutting local authority's transport costs.

Councillor John McDowall, Sustainability and Environment Portfolio Holder for South Ayrshire Council, said: "We would welcome any initiative that helped to reduce the cost of fuel to people in South Ayrshire.

"We provide services over a large geographical area and savings on fuel could be spent elsewhere. With many people living in rural areas, cars are essential to take children to school, for shopping trips, travelling to work, to the doctors and many other places."

However, Paul Watters, Head of Roads Policy at the AA, warned that the scheme would have to be carefully monitored to ensure that savings were passed on to motorists at the pump.

He said: "It was unfortunate, but when this was brought in on the islands at the same time as a 10p rise in fuel, so people expecting a rebate actually got a 5p increase.

"There would have to be full price transparency so that everybody knows they are getting the full 5p discount."