BN 38 - Hydrocarbon Oils: Duty Rates

Who is likely to be affected?

  1. Businesses producing and importing hydrocarbon oils products.

General description of the measure

  1. From 1 September 2006, excise duty rates on main road fuels will be increased by 1.25 pence per litre (ppl), in line with inflation. All other hydrocarbon oils used for road fuel will also increase in line with inflation. Effective rates of duty (that is, the relevant duty minus the relevant rebate) for non-road fuels will also be increased by 1.25 ppl, to maintain the differential to main rates. In order to maintain the current differentials with main road fuels, the duty rates for biodiesel / bioethanol will also be increased by 1.25 ppl. The duty rate for natural gas will increase by 1.25ppl (1.81 p/kg) to maintain the differential with main road fuels. The duty rate for Liquefied Petroleum Gas will increase by 2.25ppl (3.21 p/kg) to reduce the differential with main road fuels by 1ppl.

Operative date

  1. These changes will take effect from 1 September 2006.
    Current law and proposed revisions
  2. The Hydrocarbon Oil Duties Act 1979, will be amended by the Finance Bill whilst the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2005, the Excise Duties (Road Fuel Gas) (Reliefs) Regulations 2005, and the Excise Duties (Surcharges Or Rebates) (Hydrocarbon Oils etc.) (Amendment) Order 2005 will be revoked. Note that these statutory instruments are revoked with effect from the date when the Finance Bill receives Royal Assent. The new effective rates of duty are given in the
    attached table.

Further advice

  1. If you have any questions about this change, please contact the National Advice Service on 0845 010 9000.
The new effective rates of duty from 1 September 2006 will be:
Light oils Effective duty
rate per litre (£)
Ultra low sulphur petrol (ULSP)
0.4835
Sulphur-free petrol (SFP)
0.4835
Unleaded petrol that is not ULSP or SFP
0.5152
Aviation gasoline (AVGAS)
0.2884
Light oil delivered to an approved person for use as furnace fuel
0.0729
Other light oil (including leaded petrol)
0.5768
 
Heavy oils Effective duty
rate per litre (£)
Ultra low sulphur diesel (ULSD)
0.4835
Sulphur-free diesel (SFD)
0.4835
Heavy oil which is not ULSD or SFD (conventional diesel)
0.5468
Marked gas oil and ultra-low sulphur diesel not for road fuel use
0.0769
Fuel oil
0.0729
Kerosene to be used as motor fuel off-road or in an excepted
vehicle
0.0769
 
Biofuels Effective duty
rate per litre (£)
Biodiesel
0.2835
Biodiesel used otherwise than as road fuel
0.0313
Bioethanol
0.2835
 
Road fuel gases Effective duty
rate per kg (£)
Natural gas (NG)
0.1081
Road fuel gas other than natural gas – e.g. liquefied petroleum
gas (LPG)
0.1221