Gas Oil, also known as Red Diesel, makes up around 15% of the diesel used in the UK. It is currently used by quite a few industries in machinery and equipment.
The current rate of duty on red diesel is 11.14 pence per litre, whereas the rate of duty on the alternative, white diesel, is 57.95p per litre. So understandably, red diesel has been the much more affordable option for buinesses – with around an 80% saving on the duty rate.
However, as of the 1st April 2022, the government will be limiting which sectors can use red diesel – meaning that those businesses that don’t make the list will have to switch to white diesel which is much more expensive. The government’s aim is that this will force the industries affected to look at more environmentally friendly fuel options – such as Hydrotreated Vegetable Oil (HVO).
After April 1st 2022, red diesel will only be allowed to be supplied to exempt sectors which will include agriculture, amateur sports clubs and non commercial power amongst others. Sectors which will have to make the switch include the manufacturing, logistics and construction industries.
Now is the time to start considering your options if you think your business will be affected, so that everything is in place for April 2022. The government have confirmed that there will be no grace period to use up existing supplies after April 1st, so you need to be ready.
For more information, please click here to be taken to the relevant page on the government website. If you’re still not sure if this change will affect you – please contact us and we’d be happy to help answer your queries.