Red Diesel - Can You Use It To Lower Your Fuel Prices?
Posted on 28/07/2014
What is Red Diesel?
Red Diesel is no different to White Diesel in substance and function. The main difference is the price of Red Diesel compared to the more widely used White. As of June 2014 the price per litre of Red Diesel stands at 66p while white comes in at £1.36. That's better than half price in cost, and that's what makes Red Diesel so desirable.
So why the price difference? Less tax is paid on Red Diesel and is available to a specific number of trades that qualify for low costing diesel.
The 'red' element comes from the colour that is added the the diesel to help identify one from another. As Red Diesel is restricted, the red is added to make it easily detectable.
Who can use Red Diesel?
Red Diesel is offered at a reduced rate to supply a number of land vehicles that must fall under the trade of agriculture, forestry or horticulture.
Red Diesel scandals
Because of the lower cost and less tax paid on Red Diesel per litre, there are and have been a number of Red Diesel scandals in which people, even businesses have attempted to illegally supply Red Diesel for use in cars and vehicles that do not qualify for its use. Whether people are attempting to save money or make a profit, the illegal laundering of Red Diesel does not go unnoticed. Here in the UK there have been three major busts in since 2000...
'Van laundering diesel seized by HMRC in Chudleigh'
In September 2012 HMRC seized a mobile plant that would have been capable of producing 75,000 litres of fuel a year with a staggering loss £52,000 in unpaid tax.
'Irish gangs make millions by laundering cheap diesel'
October 2000 saw the police and customs officers recover equipment capable of laundering 200,000 litres a week of diesel designed for agricultural use into fuel for use in motor vehicles.
'Farmer Michael Wilmot jailed over red diesel fraud in Lincolnshire'
A farmer described as the leader of a gang that organised and ran a "sophisticated" fuel and VAT tax fraud was been jailed in July 2014. Wilmot was convicted of conspiracy to evade paying excise duty on government-subsidised fuels and conspiracy to cheat Her Majesty's Revenue. As a result of this he was sentenced to seven years in prison.