UK Government grappling with what EC ruling means

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Almost two weeks on from the announcement that red diesel prices are likely to double and the UK Government is still grappling with exactly what the European Commission’s ruling means.

The message seems to have been understood that the marine industry is going to need a lengthy transition period to adapt to the price hike, and the British Marine Federation have requested a statement from Revenue and Customs at the London Boat Show (5-14 Jan) to this effect.

But exactly what that price hike will be is what is on most boat owners’ minds.

While the European Commission’s abrupt decision on 6 December technically only imposes an extra 12p per litre (ppl) on the existing price of diesel, bringing the cost up to around 75ppl, there is an increasing feeling that the Government may impose the full 48.35p road duty rates that the marine industry always feared.

In an interview with our sister magazine Motor Boats Monthly, Treasury secretary John Healey said he is “constrained by the law on this issue” and believes full duty must be paid to comply with the EC’s ruling.

This would see diesel prices rise to more than £1 per litre, possibly pushing many owners out of their hobby altogether.

Ironically fuel prices have risen so sharply over the past three years that they were almost at EC levels anyway.
If full road duty is applied, a litre of diesel in the UK will be around 40ppl more expensive than at most marinas around the Continent, an absurd situation given that the initial aim of the EC was to harmonise tax rates across all Member States.

For a full report on the subject, see MBY’s February issue, published 9 January.