Why can the misuse of red diesel be penalised?
Red diesel, and other rebated oils, has a lower rate of duty and is therefore cheaper than diesel legally sold for vehicles using the roads. The use of red diesel is restricted, for example to agricultural vehicles and kerosene for heating. The red (gas oil) and yellow (kerosene) dyes are added to deter misuse and make it easier for Revenue and Customs officers to detect it. There is significant non-compliance with the oils Excise Duty regime. Some of this misuse is repeated and persistent with some commercial hauliers obtaining a considerable commercial advantage over their competitors. Estimates suggest that as much as £350 million is lost to the Exchequer each year from the illicit market in petrol and diesel. The wrongdoing penalty will effectively help to remove the advantage gained by misusing excise goods. Criminal prosecution will remain an option which will continue to be used where appropriate.
