Shades of red
3 May 2022
It’s been a month since the removal of the red diesel rebate in the construction industry. What’s been the impact? Posts today and tomorrow will summarise a quick straw poll I have taken amongst some tool hire and plant hirers about their experiences so far.
The government believes that removing the red diesel rebate entitlement will encourage the wider adoption of greener machinery and alternative fuels on the route to net zero, but it is a significant change.
“It’s been frustrating because it seems to me like we, in the hire industry, are policing this,” Luke George, managing director of Dorset & Somerset Hire Services told me. “Many people say they didn’t know about the red diesel change, like jobbing builders, because they hadn’t been made aware. They’ll know who Manchester City are playing next weekend but not things like this.
“Some almost felt that we were just introducing the change over to white diesel ourselves and trying to make more money. And some people are ringing us to say that, ’surely, it’s all right to put red diesel in a machine, isn’t it?’ But we are having to tell them it’s now illegal in construction and they would be breaking the law.
“Others are saying that they still have stocks of red diesel to use up and they promise to bring the machine back with white diesel in the tank, but again we tell them that they just can’t use it in construction and that they’ll have to pay to dispose of it.
“It’s really difficult for the guys on the hire desk.”
Luke says that some builders are under the wrong impression that it is 'OK to use a tractor to tow a mini excavator to a site because then it can be classed as an agricultural purpose'. But it’s the actual task that is the deciding factor, not the machine itself.
“HMRC should have let the industry keep using red diesel so that it is marked and traceable, and just raise the duty on it. This would also deter thieves," he says.
“Also, we are now asking customers to pay for their fuel upfront. On a large machine like a telehandler that takes hundreds of litres, that could be £500 – as much as, or more than, the cost of the hire. I can see some people trying to top up tanks with water and all sorts to get round the costs.
“It’s a massive can of worms that we could do without. In fact, it’s probably the biggest issue in hire that I’ve faced during 18 years in the industry,” says Luke.
Also, as mentioned earlier on the blog, the Scottish Plant Owners Association (SPOA) has reported confusion amongst fuel suppliers about using rebated red diesel in the forestry industry following the new regulations introduced on 1 April.
● More views from other hirers tomorrow.
