From 1st April 2022, the construction industry will lose their eligibility to use rebated red diesel. This change comes as the government makes efforts to reduce the carbon footprint, improve energy efficiency and meet air quality targets - but this change comes at a cost to businesses.
Cost to businesses
The current cost of rebated red diesel is 11.14 pence per litre (ppl), whereas white diesel is 57.95 ppl, making the cost to switch fuels an additional 46.81 ppl.
This, coupled with the fact that fuel prices are continuing to rise nationwide and have just reached a new record high, is putting businesses under massive financial pressure, which impacts cash flow and adds to the pressure of staying compliant.
Construction companies will face one-off costs to purchase additional tanks, vehicles and equipment to stay compliant, as well as having to remove, or run down, existing red diesel stock and source alternative fuel before the April deadline. There are likely to be significant fines for non-compliance. Companies will also need to keep good records and receipts as evidence for HMRC auditors, as they will be checking previous purchase and usage volumes.
Double the costs
Some contractors may face double the costs if they also work in agriculture (where red diesel use is still allowed), as they will need 2 supplies – 1 of red diesel (for agriculture) and 1 of white diesel (for construction), as well as 2 plants or equipment, unless they completely flush tanks and supply lines between uses, which can be difficult and time consuming.
Increased threat of theft
The red diesel rule change and the recent fuel price hikes have meant red and white diesel is much more attractive for theft, putting high numbers of vehicles and large stores of fuel at construction sites under threat.
RG Security are trusted experts in construction site security and will provide fully trained manned guards and cost-effective alarm response security systems to keep your premises safe. Our professional security team are available 24-hours a day to respond to any alarm calls, giving you complete peace of mind.
Call us today to secure your site from theft on 023 8181 0000 or email email@example.com.