The European Commission has approved a proposal to allow the Government to charge less fuel duty in the area around Hawes.
The Wensleydale market town is one of 17 parts of the UK where the UK Government has asked for permission to drop duty on petrol and diesel by up to 5p per litre.
Approval from the member states of the European Union has still to be secured before it can go ahead.
The idea of helping rural area with fuel costs has been championed by Danny Alexander, the Chief Secretary to the Treasury.
He said: “This is great news for motorists in these areas and brings a duty discount a step closer. Even though fuel prices are falling across the country, they are still higher in very rural areas.
“As someone who comes from one of the most rural areas in the UK, I know that for people who live in these areas cars are a necessity, not a luxury. I’ve fought hard to reach this major milestone.
“While we have one more stage to go, I want to make sure we are ready to implement this as a top priority so we will press for this to be heard as soon as possible and are today publishing the necessary draft regulations.”
The EU has to approve any move to offer different fuel duty rates to ensure that it does not break single market competition rules.
Some of the UK’s most remote islands already enjoy lower fuel duty rates but, if agreed, this will be the first time parts of mainland Britain has benefitted from such a measure.
Hawes and the other areas submitted to the EU have been chosen because their pump prices are higher than those in the islands where there are already discounts, they are more than 100 miles from the nearest refinery and they have very low populations.
People living in rural communities have long complained they face some of the highest fuel prices and are also the most reliant on private transport to get around.
Richmondshire Council leader John Blackie, a Hawes councillor, said: “Living in an area as remote as the upper Dales, almost everything we have to access in the way of services is miles and miles away.
“The main hospital from Hawes, if you need cancer treatment for example, is the James Cook which is a 120-mile round trop their and back.
“Operating a garage in the upper Dales is also providing a social service to local communities.”
In addition to Hawes itself, the fuel duty cut would apply to Bainbridge, Aysgarth and Woodhall.#
The other mainland locations submitted to the EU are found in the Scottish Highlands, Cumbria and Devon.
RAC fuel spokesman Simon Williams said: “This announcement is a landmark moment for mainland rural communities which are the last to benefit from the record low fuel prices now widespread across much of the UK.
“At the same time, we would caution that rural motorists will probably never see fuel cost parity with urban areas.
“This is due to higher delivery costs and the fact that motorists in towns and cities tend to benefit from intense competition between supermarket and larger independent fuel retailers, who sell greater volumes.”