Budget 2008 > Indirect tax > Hydrocarbon oils
 

Hydrocarbon oils

Duty rates will be increased and some rates will be simplified with effect from April 2008.  The three existing duty rates for heavy oil (diesel) will be reduced to one (heavy oil).  After 1 October 2008, this rate will increase by 2 pence per litre and subsequently will rise in April 2009 by 1.84 pence per litre and after April 2010 by 0.5 pence per litre above indexation in that year.  The changes also see an introduction of a rebated rate for biodiesel and bioblend with effect from April 2008.

The expected 2 pence per litre increase in the duty rate for petrol and most forecourt diesel will be delayed until 1 October 2008.

From 2010, the current duty differential of 20 pence per litre for biofuels for road use will cease and thereafter will be charged at the same rate as main road fuels. This will raise £550m in 2010-11.