Boaters to pay over £1 a litre for red diesel from 1 November

The Government has announced its long-awaited decision on the future of red diesel – and it’s not good news for boaters.

On 28 February 2008, HM Revenue & Customs revealed that from 1 November this year, boaters will be paying a duty rate of 56.94 pence per litre, instead of the current rate of 9.69 pence per litre.

This will see prices of diesel for leisure boaters rocket from around 60p to over £1 a litre.

The silver lining is the diesel supply chain will remain unchanged. The Government had considered enforcing a universal change to white diesel (see below), which would have forced many remote diesel suppliers to install a seperate tank for white diesel.

Obviously, the attendant costs would have meant many simply stopped supplying leisure boaters, and therefore parts of the UK might have been put out of reach.

But as far as good news goes, that’s about it. As mentioned, commercial boaters will still be able to fill up with rebated red diesel. So how will the fuel vendor differentiate between leisure and commercial boaters?

This has still to be decided, and will be detailed in MBM as soon as the news is announced. What we do know is the onus will be on the vendor to flip between higher and lower rates at the pump.

Boaters, too, will be forced to keep records of all diesel purchases, as it will become a criminal offence to have diesel on board for propulsion that you cannot prove was bought at the higher rate of diesel.

Interestingly, diesel bought for use as heating fuel will still be available at a rebated rate. So to add further complication, there will be a system in place where you can declare that a proportion of the diesel you are taking on is for ‘domestic purposes’!

Only time will tell whether this news will hit the market, but it’s not hard to imagine it having some impact.