Hydrocarbon oils: duty rates
Who is likely to be affected?
1. Businesses producing and importing hydrocarbon oils products.
General description of the measure
2. From 7 December 2006, the effective excise duty rates for road fuels will be increased by 1.25 pence per litre (ppl), in line with the inflationary increases announced at Budget 2006. 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.
3. In order to maintain the current differentials with main road fuels, the effective duty rates for biodiesel and bioethanol will also be increased by 1.25 ppl. The effective duty rate for natural gas will increase by 1.81 p/kg (equivalent to 1.25ppl) to maintain the differential with main road fuels. The effective duty rate for liquefied petroleum gas will increase by 3.21p/kg (equivalent to 2.25ppl) to reduce the differential with main road fuels by the equivalent of 1ppl.
Operative date
4. The changes will have effect on and after 7 December 2006.
Current law and proposed revisions
5. The Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2006 and the Excise Duties (Road Fuel Gas) (Reliefs) Regulations 2006 will be revoked, with effect from 7 December 2006, by the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Revocation) Order 2006 and the Excise Duties (Road Fuel Gas) (Reliefs) (Revocation) Regulations 2006.
6. The new effective rates of duty are given in the attached table. Changes to the rate for rebated gas oil mixed with biodiesel for the purposes of pilot projects are detailed in a separate PBR Note on biofuels.
7. The new effective rates of duty 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 |
Further advice
8. If you have any questions about these changes, please contact the National Advice Service on 0845 010 9000.
