Ross Molloy, who owns RGM Brailsford Garage in Derbyshire, predicts his business will suffer when the Government alters the rules on rebated diesel. Rebated, or red, diesel is subject to less fuel duty than white diesel, otherwise known as normal road fuel diesel, and is therefore cheaper. The red variant contains red dye along with other chemical markers that mark it out as rebated.
Changes were this month implemented earlier by the Government, which means rebated diesel is banned in several situations, reports Derbyshire Live.
People are no longer allowed to use rebated diesel for non-road mobile machinery – this includes cranes, bulldozers, and powering mobile generators on construction sites.
Speaking to Derbyshire Live, Ross said: “They are drastically reducing the amount people can use in red diesel. Nobody in construction, no JCB drivers, no plant machinery, even heating, if you have commercial premises you can’t use red diesel in it now.
“Everything is going to go up. The price of any construction or building work will go up.”
Rebated diesel is still permitted to be used in certain industries such as agriculture and railway, but everyone else must use diesel or fuel that has its full rate of fuel duty paid. Red diesel makes up about 15% of total diesel usage in the UK, according to the Government.
Ross added: “People can still use it (red diesel) for golf courses, recreational activities, agricultural activities, and still use it for trains. You can use red diesel to heat your private garage at home but not on commercial premises.
“I sell a lot of red diesel by the pump, I have a heck of a lot of construction businesses which buy it off me, and they won’t be able to have it off of me. I’m not making much on it anyway, and 80% of my clients won’t be able to have it, so is it worth me selling it?”
The decision has been criticised by the director of policy and public affairs at the Road Haulage Association, Rod McKenzie. He said the change would “damage the business” of hauliers and argued it would cause a £1.4billion hit to businesses and small hauliers.