December 6, 2021

Could the construction sector be at risk of sleepwalking into a fuel crisis?

A major UK fuel supplier has raised concerns that many construction companies are unaware of imminent changes to how they can legally power plant and machinery. From 1st April 2022, the construction and road building industries – along with a host of other sectors including logistics and haulage, mining and quarrying, and gas and oil extraction – will no longer be able to use rebated red diesel or rebated biodiesel in vehicles and machinery.

Instead, they will have to switch to white diesel which carries a duty of 57.95p per litre – 46.81p higher than red diesel – as well as VAT charged at 20%.

The drastic changes are being introduced to help the UK government achieve its target of net zero carbon emissions by 2050 by encouraging firms to use less fuel or investment in energy efficient technologies which utilise greener alternatives.

But Rix Petroleum Managing Director, Duncan Lambert, said there is a deeply concerning lack of awareness of the changes among construction companies, which should be starting to plan to fill their tanks with fuel they can use beyond 1st April next year.

He said the industry risked sleepwalking into a situation where it would need to replace existing fuel stocks with legal alternatives or face being charged duty retrospectively if caught still using red diesel after the deadline.

Mr Lambert said: “The lack of awareness in the marketplace that red diesel cannot be used beyond March next year is staggering. Our sales teams are reporting that large construction businesses are almost completely unaware they soon won’t be able to use it. There should have been far greater communication from central government on such a far-reaching issue as this.

“We are now in the position of having to educate the marketplace and although that is certainly a role we are willing to take on, there is only so much we can do.”

Mr Lambert added construction companies should now start to think about running down existing fuel stocks to prepared for the 1st April deadline.

Red diesel can be sold of disposed of, he said, but records must be kept as to who it was sold to or how it was disposed of.

Mr Lambert said: “If you were unaware that red diesel is no longer an option from April, now is the time to take action. Do not increase your orders or try to stockpile fuel, instead speak to your fuel provider about the best way to switch and the most cost-effective alternatives.