Red diesel rebate under threat

THE GOVERNMENT has launched a consultation into the use of rebated gas oils with a view to tightening the rules governing the use of red diesel.

Users of rebated fuels currently pay an effective duty rate of 5.22p per litre, 41.88p per litre less than standard fuel for road use.

Vehicles entitled to run on red diesel are classified as those used exclusively off-road or used on public roads only incidentally – journeys of brief duration or infrequent occurrence.

According to the Treasury, recent investigations show that “increasingly tractors are being used to haul agricultural goods simply because entitlement to use rebated gas oil makes them more economic for this purpose than other forms of haulage.”

This, combined with other more clear-cut illegal use of red diesel, constitutes what the government refers to as oil fraud.

Illicit use costs the Exchequer more than £0.5bn each year – a definite incentive for the government‘s recent decision to investigate red diesel use.

High-speed tractors, suspension, air-cushioned seats and more efficient braking systems have led to the use of tractors in preference to vehicles that do not qualify to use red diesel, according to the document.

Lower safety standards than conventional road-going vehicles and the higher pollutant content of red diesel are other factors which the government uses to justify its increased scrutiny of fuel use.

For Suffolk contractor Robert Self, proposals within the consultation to limit the distance travelled using red diesel could have serious implications for his business.

If the government decides to tackle conventional tractors hauling agricultural loads over considerable distances then it could cripple us,” said Mr Self.

“When we‘re cutting silage we can often find ourselves making 30-mile round trips. It‘s already difficult enough to make a margin – if we the have to start using white diesel at 80p per litre it would knock the financial viability of our operations on the head.”

In fact, fuel use legislation has already put one of Mr Self‘s enterprises in jeopardy.

Throughout the winter a JCB Fastrac and driver were hired out on vegetable haulage duties, covering nearly 450km (280 miles) a day during the busiest periods.

But the law requires fully taxable white diesel to be used for such operations.

“If we can‘t run legally I am not prepared to keep breaking the law,” insisted Mr Self.

“Vegetable haulage provided a useful winter income, but we‘ve had to pull out because the cost of using white diesel would make it unviable.

“If the same sort of restrictions are placed on conventional tractors undertaking clear-cut agricultural tasks it could spell bad news for the industry as a whole.”