Skip to main content

Tax Allowances: Fuel Oil

Volume 497: debated on Thursday 22 October 2009

To ask the Chancellor of the Exchequer (1) if he will consider introducing tax exemption for mineralogical processes which use recovered fuel oil; (294959)

(2) what the difference is in the tax treatment on the use of recovered fuel oil in the (a) steel, (b) electricity and (c) lime manufacturing industries; and if he will make a statement.

The Government keep all taxes under review. Any changes to tax policy are announced by the Chancellor as part of his Budget judgment in the normal Budget and pre-Budget report process.

Recovered fuel oil used in blast furnaces is not subject to fuel duty as the oil is being used as a chemical reductant rather than as a fuel. Fuels used to generate electricity are exempt from duty to avoid double taxation since electricity is subject to climate change levy. Recovered fuel oil used in the lime manufacturing industry is subject to duty at the same rate as fuel oil, the fuel for which it most commonly substitutes. This rate is 10.37p per litre.