§ Ms Lawrence
To ask the Chancellor of the Exchequer what representations he has received from oil companies concerning duties on ultra-low sulphur diesel since his Budget on 17 March.396W
§ Dawn Primarolo
Representations were received from three oil companies and one oil industry association concerning the changes to the ultra-low sulphur diesel (ULSD) definition in the Finance Bill. These representations concerned both the new definition of ULSD and the new restrictions on mixing of ULSD with conventional diesel after the duty point.
The Government changed the definition of ULSD because the previous sole criteria of 50 ppm sulphur content did not produce sufficient emissions benefits to justify the duty incentive. The new definition produces more significant emissions benefits, mainly of particulates and nitrogen oxide, and the duty incentive of 2 pence per litre recognises that the new specification is more difficult to produce. The duty incentive is to increase to 3 pence per litre in the next Budget.
The new mixing restrictions were introduced to prevent ULSD, which has had the benefit of the duty incentive, being mixed with conventional diesel after the duty point and then being sold as conventional diesel. These mixtures do not generate much by way of emissions gains in return for the duty incentive and +they do not encourage motorists to switch to the cleaner fuel. Similar provisions already existed to prevent mixing of different qualities of petrol.