NFU Scotland has questioned the Chancellor’s rationale for increasing the duty on red diesel in his pre-Budget report.

Despite freezing the duty on main road fuels due to the volatile oil market, the Chancellor announced a 1.22p/litre increase in the duty on red diesel, which is a rise of over 20%.

NFUS president John Kinnaird said: “When I last wrote to the Chancellor urging him to delay any red diesel rise, he agreed because of the volatility in the oil market. 

“That problem is still very much to the fore and is the reasoning behind his announcement today to freeze normal road fuel duties. 

“I am therefore intrigued to learn why his policy has changed over the course of a few months and why one sector will get hit with a fuel tax hike.

“I simply do not buy the argument that a 1.22p/litre rise will help tackle oil fraud. 

“If the Chancellor is genuinely committed to that, he needs to ensure there is tighter policing of the existing law, which we would fully support.”

But the pre-Budget report did contain some good news for farmers.

It included a package of measures to boost UK production and demand for biofuels and biomass which should complement the recommendations of the Gill task force and the new Renewable Transport Fuel Obligation.

The package includes a reduced rate of VAT on biomass boilers, and Enhanced Capital Allowances on the most efficient biofuel processing plants.