The tax regime is inherited from marine bunkering. Unless every state imposes the same tax you just get fuel tankered around from where it is cheapest.
What HMG would no doubt love to do is tax fuel for domestic use while keeping it tax free for international use.
We already have the daft situation where the export of your spending power to your holiday home in Spain is subsidised with tax-free fuel whereas the trip to your holiday home in the UK by car is heavily taxed.
Mike