Major diesel changes being introduced in weeks will punish drivers

In the next few weeks, rebated diesel, sometimes referred to as red diesel, and rebated biofuels will no longer be allowed.

People will only be able to use rebated fuels for specific purposes, like machines, vessels and appliances.

If the motorists don't use rebated fuel, they will need diesel or biofuel which the full rate of fuel duty has been paid for.

The rebated fuels impacted by these changes are rebated diesel, rebated Hydrotreated Vegetable Oil (HVO), rebated biodiesel and bioblend, kerosene taxed at the rebated diesel rate and fuel substitutes.

HVO is a liquid hydrocarbon which is classified for excise purposes like heavy oil and treated the same as diesel.

But fully rebated kerosene is unaffected by these changes and can be used for all heating purposes.

From April, it will no longer be legal to use red diesel for non-road mobile machinery such as bulldozes and cranes or to power mobile generations on construction sites.

Businesses should prepare for the change by running down stocks of red diesel in storage tanks and considering the cost implications of a move to "white" diesel and whether these costs can be passed to customers or contractors.

And according to the government, red diesel use accounts for around 15% of the total diesel in the UK.

Rod McKenzie, director of policy and public affairs at the Road Haulage Association, said: "UK hauliers have done a heroic job in keeping the economy running during the Covid crisis.

"Punishing them with a red diesel hike tax is damaging to their business and we urgently call on the government to reconsider this move."

The RHA stated: "We are making the move due to the crippling cost pressures that hauliers are experiencing as we emerge from the pandemic and one year on from the UK's departure from the EU.

"With shortages of drivers, vehicles and parts combined with increasing wage, fuel, and energy costs, now is not the time to pile on extra costs on small businesses and put our economic recovery at risk."

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It added: "The costs of operating a 44-tonne truck have increased by nearly 17% in the past year.

"As the global oil price and demand for fuels increases, we have near record diesel prices compounded by an 18% increase in driver wages.

"Small hauliers operating on thin margins simply cannot cope with the added pressure of the loss of the red-diesel rebated fuel in April which would add over 1% in running costs for a lorry."

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