Because many of the oils which are supplied
‘rebated’ would be suitable for illicit use as a road
fuel or as an road fuel extender, most types of rebated fuel are
marked and/or dyed as evidence that this has been supplied at a
reduced rate of duty, either for off road or for other eligible
use.
Marked rebated mineral oils and AVTUR remain controlled
beyond the duty point until they have been supplied and/or put to
eligible use, under the Registered Dealer in Controlled Oil (RDCO)
scheme. This is because there is an incentive to misuse them as a
road fuel (MGO) or as a road fuel additive or extender
(AVTUR/Kerosene) due to the difference between the full un-rebated
and rebated duty rates involved.
To counter this risk the department implemented the Oils
Strategy, which is aimed at reducing and controlling the volumes of
marked rebated mineral oils being diverted to illegal road fuel
use.
For further Information on the RDCO Scheme see
Public Notice 192.
Except where the requirements have been waived (see the section on ‘Marking’, HCOTEG122085 in this guidance), gas oil and kerosene may be delivered for home use at the rebated rate of duty only if marked and, in the case of gas oil, dyed. Other heavy oil may be delivered from home use, other than as fuel for use in a road vehicle, at the rebated rate without any similar restriction.
See paragraph HCOTEG122085 of the section on ‘Marking’ in this guidance.
Certain traders are approved by MORC to receive light oil for
use as furnace fuel. Provided the oil for this purpose is marked in
the same way as gas oil, it may be delivered to such traders at the
rebated rate of duty.
Public Notice 179, Section 7.12 contains further details.
