Railways to use white diesel?

[furnessvale]

Rumours abound that all use of red diesel, with the exception of agriculture, will be banned in the upcoming budget.

In the long term this must encourage more electrification, but in the short term what losses of passengers to road and air, and freight to roads will this cost?

Better stop exporting 90s and 91s and stand by for engine changing where diesel and electric routes meet!

https://www.thetimes.co.uk/article/rishi-sunak-budget-chancellor-to-cut-red-diesel-subsidy-s68t3jvjc
"Rishi Sunak is expected to cut subsidies for a type of diesel used by off-road vehicles and machinery as he backs away from ending the freeze for fuel duty paid by motorists."

 

[Bletchleyite]

I hope they don't do that. That could potentially cause widespread closures.

 

[Starmill]

Although I've come across the terms before, an explanation of red diesel and its tax implications, for the benefit of readers, might be a good idea.

 

[GRALISTAIR]

Although I've come across the terms before, an explanation of red diesel and its tax implications, for the benefit of readers, might be a good idea.

Agreed. Yes please. Is it just tax or is one worse than the other in health etc terms?

Found the answer - no health difference just a red dye added for tax reasons and inspection

 

[daikilo]

TOCs will claim extra costs and force government to pay! And government will pay itself for the 2 DOR subsidiaries and NR. Only "losers" will be the Freight operating companies who will pass it on to their customers then to the public.

Red diesel is transparent diesel + a dye (which also gets burnt off). You may be thinking of bunker fuel that some ships use and is much less refined hence more polluting when burnt.

 

[yorksrob]

Air travel is hardly a green panacea, and people will hardly welcome a large increase in road traffic, particularly freight.

The gmt had better start worrying about unintended consequences.

 

[randyrippley]

Although I've come across the terms before, an explanation of red diesel and its tax implications, for the benefit of readers, might be a good idea.

best to read this government document, which explains it quite well
https://www.gov.uk/government/consu...all-for-evidence/red-diesel-call-for-evidence

 

[furnessvale]

TOCs will claim extra costs and force government to pay! And government will pay itself for the 2 DOR subsidiaries and NR. Only "losers" will be the Freight operating companies who will pass it on to their customers then to the public.

Red diesel is transparent diesel + a dye (which also gets burnt off). You may be thinking of bunker fuel that some ships use and is much less refined hence more polluting when burnt.

Except that in many areas margins are wafer thin so any increase in price will see transfers to road.

On the roads, fuel duty pays for their upkeep and is in effect a "road access charge". The only equitable measure for rail would be abolition of track access charges if white diesel has to be used.

 

[Llanigraham]

I hope they don't do that. That could potentially cause widespread closures.

Why would it cause closures?
All that would happen would be that fares would have to go up to cover the increased price of the diesel.

 

[Llanigraham]

Except that in many areas margins are wafer thin so any increase in price will see transfers to road.

On the roads, fuel duty pays for their upkeep and is in effect a "road access charge". The only equitable measure for rail would be abolition of track access charges if white diesel has to be used.

No it doesn't. It is like any other tax and goes into the general taxation fund that ends up paying for everything from roads to hospitals to schools.

 

[paul1609]

Would have major implications for Heritage Railways, i would suggest it would mean the end of many diesel galas and big engines pulling 4 coach trains.

 

[DimTim]

Withdraw red diesel & set up a rebate scheme to registered users. Too much is being used illegally in road vehicles eg taxis. I.e. submit invoices for rebate.

 

[DerekC]

Planes use aviation kerosene which is similar but higher quality and tax free. I think there would be a big outcry from the environmental groups if rail fuel were taxed and aviation continued not to be. The problem with aviation is that (except on domestic flights) taxing it needs international agreement. The USA (no surprise) is the main country blocking such agreements.

 

[bassmike]

Just another ill-informed unthought-out knee-jerk from this unbelievleably disfunctional ' Govt:'

 

[Bletchleyite]

Withdraw red diesel & set up a rebate scheme to registered users. Too much is being used illegally in road vehicles eg taxis. I.e. submit invoices for rebate.

That isn't a terrible idea and does align with BSOG for buses.

 

[Grumpy Git]

I wonder if there is much less chance of getting caught using "cherry" diesel of late? I can't see how the DoT has escaped cuts as every other public service has been pared to the bone and beyond.

 

[Bovverboy]

Rumours abound that all use of red diesel, with the exception of agriculture, will be banned in the upcoming budget.

In the long term this must encourage more electrification, but in the short term what losses of passengers to road and air, and freight to roads will this cost?

First of all, can I explode this apparent myth that the ending of rebated diesel ('red' diesel) would result in a transfer of rail freight to roads. Fuel costs of road freight transport are a higher proportion of total costs than they are for rail freight transport, so the ending of fuel rebates would actually benefit rail freight. The same applies in respect of transport of passengers by bus versus transport of passengers by rail, what is supposedly being proposed actually favours rail transport.
As to potential transfer of passenger traffic to private transport, I can't see that that's any big threat, the proportion of the price of a rail passenger ticket which can be ascribed to covering train fuel costs must be quite small, and the tax element even smaller.
Air is perhaps a different ball game, since UK airlines are in competition with foreign airlines which the UK government might not have its preferred degree of control over, but is someone who commutes daily from, say, Harrow & Wealdstone to London Euston going to suddenly switch to commuting by air?

 

[theageofthetra]

Surely the biggest impact of this tax grab is on builders plant--in a purely railway context how much extra will this cost Network Rail via it's various plant contractors.

 

[Bovverboy]

Surely the biggest impact of this tax grab is on builders plant--in a purely railway context how much extra will this cost Network Rail via it's various plant contractors.

Next to nothing.

 

[Facing Back]

First of all, can I explode this apparent myth that the ending of rebated diesel ('red' diesel) would result in a transfer of rail freight to roads. Fuel costs of road freight transport are a higher proportion of total costs than they are for rail freight transport, so the ending of fuel rebates would actually benefit rail freight. The same applies in respect of transport of passengers by bus versus transport of passengers by rail, what is supposedly being proposed actually favours rail transport.
As to potential transfer of passenger traffic to private transport, I can't see that that's any big threat, the proportion of the price of a rail passenger ticket which can be ascribed to covering train fuel costs must be quite small, and the tax element even smaller.
Air is perhaps a different ball game, since UK airlines are in competition with foreign airlines which the UK government might not have its preferred degree of control over, but is someone who commutes daily from, say, Harrow & Wealdstone to London Euston going to suddenly switch to commuting by air?

I'm sorry and its late but I cant quite grasp your points.

Road haulage does not use red diesel and pays duty on its fuel (DERV) so it would see no increase in cost from this where rail would. The same would apply to buses vs passenger trains although I cant see how the TOCs would be able to absorb this tax so either fares or the rebate would rise.

Air is a red herring. Duty on aviation fuel is currently governed by international treaty and we'd be in breach to change that unilaterally - as appealing as a flight from Harrow to Euston might be.

It seems to be that putting duty on rail fuel will net nothing. Electification - and dare I say it hydrogen? Better long term options.

 

[Bovverboy]

Road haulage does not use red diesel and pays duty on its fuel (DERV) so it would see no increase in cost from this where rail would.

I wasn't thinking straight there, although I should add, road hauliers do use red diesel for refrigeration units.

The same would apply to buses vs passenger trains although I cant see how the TOCs would be able to absorb this tax so either fares or the rebate would rise.

The last time I had anything to do with buses (which is not very many years ago) they did use rebated fuel, this was calculated on a mileage basis. I don't know if anything has changed since.

Air is a red herring. Duty on aviation fuel is currently governed by international treaty and we'd be in breach to change that unilaterally - as appealing as a flight from Harrow to Euston might be.

The government does have some degree of control of aviation costs - in airport charges, for example.

 

[furnessvale]

I wasn't thinking straight there, although I should add, road hauliers do use red diesel for refrigeration units.

The last time I had anything to do with buses (which is not very many years ago) they did use rebated fuel, this was calculated on a mileage basis. I don't know if anything has changed since.

Railways also use red diesel in refridgeration units and would be similarly hit. The RHA has estimated that this will cost the road haulage industry £100m pa in fridge units.

Britain's railways use 622m litres of diesel pa for traction. The extra duty will be 47.25ppl. This means the extra cost to the railways will be £294m per annum plus whatever goes in fridge units.

 

[Bletchleyite]

To be fair, the Government could make the effect negative by committing that as additional rail subsidy. It could also work to incentivise freight operators to stop using diesels for everything as they now do. There is a LOT of under-wires freight diesel operation and it really could do with being packed in.

 

[furnessvale]

No it doesn't. It is like any other tax and goes into the general taxation fund that ends up paying for everything from roads to hospitals to schools.

Let's put it a different way then. The FOCs pay a specific charge per km to use the track. Road hauliers do not, which puts railfreight at a disadvantage which will be enhanced if rail no longer uses rebated fuel.

 

[Llanigraham]

I wonder if there is much less chance of getting caught using "cherry" diesel of late? I can't see how the DoT has escaped cuts as every other public service has been pared to the bone and beyond.

I don't know where you live but around here DVSA Inspections are quite common, especially around the various livestock markets.
And they do catch people!

 

[Grumpy Git]

Please delete (OT)

 

[LNW-GW Joint]

Planes use aviation kerosene which is similar but higher quality and tax free. I think there would be a big outcry from the environmental groups if rail fuel were taxed and aviation continued not to be. The problem with aviation is that (except on domestic flights) taxing it needs international agreement. The USA (no surprise) is the main country blocking such agreements.

That's partly why UK Airport Passenger Duty (APD) was invented, to compensate for the lack of aviation fuel taxes.
Some countries tax rail fares (eg Germany applies VAT, recently reduced for long-distance journeys).

 

[Grumpy Git]

I don't know where you live but around here DVSA Inspections are quite common, especially around the various livestock markets.
And they do catch people!

Good to know. I wonder how many are caught driving £80K+ Range Rovers?

 

[Llanigraham]

Good to know. I wonder how many are caught driving £80K+ Range Rovers?

Not many of those in the farming community around here!!
Those belong to the in-comers and weekend cottage owners.

 

[dk1]

I hope they don't do that. That could potentially cause widespread closures.

Wouldn't make any difference apart from the government will have to subsidise things that little bit more than they do now.