The Final Curtain for Red Diesel
On 1st April 2022, the government will stop subsidising the tax on red diesel for the whole of the construction and plant hire industry, so it will become illegal to use the current rebated diesel fuel (which is currently priced at c.£0.69 pence per litre plus VAT) and we will be forced into running all our plant and equipment on ‘road-legal’ white diesel (which is currently priced at c.£1.20 pence per litre plus VAT).
For many years, red diesel has been used by the construction industry, and when heavy demolition plant and earth-moving equipment is needed you can imagine the amount of fuel that is needed to generate the power to operate this type of machinery, some of which can weigh as much as 70 tonnes, and sometime more. A 40-tonne excavator for instance has a 550 litre fuel tank (120 gallons) and can use anything up to 30 litres of fuel per hour, so that’s an extra £150.00 per 10hr day shift, so nearly £1,000 extra fuel cost on a 6-day week.
Using red diesel saves businesses thousands of pounds each year and therefore saying ‘goodbye’ to this rebated fuel is going to be a bitter pill to swallow for us all within the construction industry, and in particular the clients and customers of the construction industry, who are going to find themselves paying more for the goods and services that we provide.
Fingers crossed for a government ‘U-turn’ on this… but don’t hold your breath.