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FAQ: Road fuels and other oils

 

Contents

What is the duty rate for super unleaded and/or lead replacement petrol?

What is the Government’s policy on road fuel gas?

Are alternative fuels subject to duty?

Can I run my vehicle on rebated heavy oil (red diesel)?

How much fuel can a commercial vehicle bring into the UK without paying additional duty?

Are there any reliefs or repayments available from excise duty?

Can I obtain excise duty relief for oil used to generate electricity?

 

What is the duty rate for super unleaded and/or lead replacement petrol?

Since Budget 2001, higher octane fuels such as these are charged duty at either the unleaded or ultra low sulphur petrol rate, depending on the sulphur and aromatics content of the fuel. This decision was taken following an environmental assessment (published on the Department for Transport website), which showed that higher octane fuels were generally no more polluting than the lower octane alternatives.

What is the Government’s policy on road fuel gas?

Excise duty is due on gas for use as road fuel. The most common forms of road fuel gas are liquefied petroleum gas (LPG), and compressed natural gas.

Following a consultation on how best to ensure that future support for road fuel gases continues to reflect environmental and other policy objectives, the 2003 Pre-Budget Report announced that the duty incentive for LPG would be decreased over time to a level more commensurate with its environmental benefits, and that the incentive relative to the main road fuels for natural gas would be maintained at its current level until 2007.

To reflect the relative environmental benefits of the fuel more accurately Budget 2006 announced the duty differential between LPG and main road fuels will be reduced by the equivalent of 1 penny per litre each year to 2008-09 and that the duty differential between Natural Gas rates and main duty rates will be maintained each year until 2008-09. The rate of duty for LPG increased to 12.21 pence per kilogram and for natural gas to 10.81 pence per kilogram on 7 December 2006. This decision is in line with the established alternative fuels framework. Public Notice 76 Excise Duty on Gas for use as Fuel in Road Vehicles provides further, detailed information.

Are alternative fuels subject to duty?

Unless used within an authorised pilot project, alternative fuels are charged duty at the same rate as the fuel they replace. Department for Environment, Food & Rural Affairs (DEFRA) website provides more information on alternative fuels.

A duty incentive for biodiesel of 20 pence per litre relative to the main road fuels was introduced on 26 July 2002. A similar incentive was introduced for bioethanol on 1 January 2005. These differentials were maintained with the duty increases announced in Budget 2006.

Can I run my vehicle on rebated heavy oil (red diesel)?

Only 'excepted vehicles' (Public Notice 75 - Appendix C) can use rebated heavy oil (red diesel) as fuel when used on the public road.

Using rebated heavy oil as road fuel in anything other than an 'excepted vehicle' may render that vehicle liable to seizure. Also, financial penalties may be imposed on the owner/driver of the vehicle.

Public Notice 75 Fuel for diesel vehicles provides further, detailed information.

How much fuel can a commercial vehicle bring into the UK without paying additional duty?

You may bring in the fuel which is held in the ‘standard tank’ of the vehicle in question, provided that the fuel is not removed from the vehicle. The fuel may only be used in the vehicle in which it was imported. In addition, fuel may be brought into the UK in a ‘special container’ for on-board refrigeration systems on condition that this ‘special container’ is not connected to the engine or the fuel system of the vehicle. If you are in any way unsure, contact the Customs National Advice Service for further advice.

Are there any reliefs or repayments available from excise duty?

There are three main Schemes which allow repayment or relief from excise duty on oils. To find out if you qualify, read on:

  • Do you use oil as part of a industrial process? For example in paint or creosote manufacturing and other than for use in an engine, motor or other machinery or for use as a heating fuel? Then you may by eligible to receive oil conditionally relieved of duty under the Tied Oil Scheme.

Public Notice 184A Mineral (Hydrocarbon) Oils put to certain uses: Excise Duty Relief provides further details.

  • Do you use heavy or light oil as fuel for machinery for a vessel (but not pleasure craft)? If that voyage comes within the definition of a marine voyage then you may be entitled to relief from excise duty.

Public Notice 263 Marine Voyages - Excise duty relief for Mineral (Hydrocarbon) Oil provides further details.

  • Do you use heavy oil to grow horticultural produce primarily for sale? Then you may be entitled to repayment of excise duty.

Public Notice 183 Mineral (Hydrocarbon) Oil Repayment of Excise Duty on Heavy Oil used by Growers of Horticultural Produce provides further details.

Can I obtain excise duty relief for oil used to generate electricity?

Yes. This relief was introduced 1 January 2006.

Public Notice 175 Motor and Heating Fuels: Relief from Excise Duty - Oils used to generate electricity provides further details.

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$START-DATA$ title=FAQ: Road fuels and other oils^ summary=Answers to common questions on road fuels and other oils^ doctype=General^ date=13-Apr-2012^ author=lk125388^ $END-DATA$
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