Red diesel: the current state of play

A quick summary of the current red diesel situation for UK boaters

Not all that much has changed since December, but here’s a quick re-cap of where we are.

In December the Government announced that the European Commission had turned down the UK’s request for an extension to its derogation from the Energy Products Directive. This meant that UK boaters could no longer buy low-tax diesel.

In the Budget, the Government announced that a transitionary period will last until 1 November 2008. Until then, nothing will change, and we are still free to fill up with red diesel.

What will happen in November isn’t known. The Treasury is in consultation with relevant bodies to decide on a course of action.

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According to the Energy Products Directive, diesel must be taxed at a minimum of around 20p per litre, as opposed to the 7.69p duty on red diesel currently, and the 48.35p rate on roadside duty.

While there were initial hopes that red diesel might be charged at 20p per litre to motorboaters, Treasury officials claim that the Commission will not allow them to provide a preferential rate for pleasure boaters over other users of diesel fuel.

Failing that, it is hoped that the Government will at least allow motorboaters to continue to fill up with red diesel – albeit at a higher tax rate – so that all recreational and commercial boaters use the same fuel. This will at least ease problems of availability, as suppliers will not need to choose between running ‘red’ and ‘white’ pumps.

We’ll keep you updated with more news as it happens.


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