| Introduction | | | | station pays a higher fuel duty of 48.35 p.p.l. and the |
| At the 1900 World’s Fair in Paris a German Dr | | | | higher VAT rate of 17.5%. |
| Rudolph Diesel unveiled the world’s first | | | | The derogation of red diesel has existed since the |
| compression-ignition engine capable of working on a | | | | 1930’s but is to cease following the confirmation |
| number of fuels including peanut oil. | | | | that the European Directive 2003/96/EC is to be |
| It was not too long before the first hydrocarbon oil | | | | applied to UK private recreational craft from 1st |
| duty was first imposed in 1928 by Winston Churchill, | | | | November 2008. As an EU member, the UK is obliged |
| as Chancellor of the Exchequer in Stanley | | | | to work from the same tax rules as everyone else |
| Baldwin’s government. Full duty was imposed on | | | | and the transitional period to adjust to EU taxation |
| light oils, such as petrol, and a lower rebated duty on | | | | rules will come to an end within this context. |
| heavy oils, e.g. as diesel. However in 1935 with the | | | | In contrast, already leisure boat users across the EU |
| development of diesel engines for cars, petrol sales | | | | fill up with the same white diesel and pay the same |
| declined to such an extent that in 1935 the | | | | level of fuel duty as their road users. Exceptions at |
| Government applied the full rate of duty to heavy | | | | present are UK, Ireland, Finland, Belgium, Malta and |
| oils e.g. diesel. | | | | Corsica. |
| An important distinction was made that this full rate | | | | The Future - from 1st November 2008 |
| of duty only applied to diesel for use as road fuel, | | | | Red diesel is here to stay! Whilst various proposals |
| agricultural vehicles and boats would still benefit from | | | | were put forward red diesel is to be retained at |
| the lower rebated duty on fuel. Why this allowance | | | | marinas and waterside pumps, but sold at two |
| was made to leisure boat owners back in the | | | | different prices. |
| 1930’s is not clear but due to EU taxation | | | | Commercially operated craft are not affected and will |
| alignment it ceases from the 01st November 2008 | | | | continue buy at the current low-duty rate. The leisure |
| for owners of leisure boats who use red diesel to | | | | boat owner who continues to buy red diesel is to be |
| propel their craft. | | | | charged the top rate of fuel duty for heavy oil which |
| Red Diesel is a grade of gas oil for which low fuel | | | | is not ULSD or SFD (Sulphur Free Diesel) i.e. 56.94 p.p.l. |
| duty is currently applied and has been artificially dyed | | | | fuel duty i.e. on Red diesel. |
| red since 1961 to distinguish it from other fuels. Whilst | | | | If compared with supplying White Diesel rather than |
| almost identical to the ‘white diesel’ bought | | | | Red Diesel at waterside pumps there is an increase |
| at the road side, red diesel contains higher sulphur | | | | of about 6 p.p.l.in fuel duty by keeping Red Diesel at |
| content and is therefore less environmentally friendly. | | | | the pumps for leisure boat owners. However keeping |
| The centane reading also differ, in red diesel it is | | | | the current supply lines in place will mean less |
| around 45 and in white diesel a minimum centane | | | | disruption to the infrastructure. |
| reading of 51is achieved. The higher the centane | | | | The leisure boat user is required to self-declare the |
| reading the better the engine should run. | | | | duty difference at a later date. There is an exception |
| Presently | | | | that red diesel for domestic use on board is to be |
| At present for waterside users the marine red diesel | | | | charged at the lower rate of fuel duty, the |
| is subject to a fuel low-duty rate of about 7.69 | | | | consumption levels of ‘domestic’ e.g. heating |
| pence per litre p.p.l. and a VAT rate of 5%. The UK | | | | and other ‘domestic uses’ may experience a |
| road user who purchases Ultra Low Sulphur Diesel | | | | small increase from the 1st November 2008. |
| (ULSD) or ‘white diesel’ at the roadside filling | | | | |