Manufacturing & Engineering UK-wide

Meet motor fuel quality and hydrocarbon oil duty

The fuels you make carry two duties beyond running a safe installation: they must meet the motor fuel quality standards for what can be supplied, and the mineral oils you produce are subject to hydrocarbon oil (excise) duty, with HMRC approval and accounting. This guide takes you through both.

Guide summary

You must make sure your petrol and diesel meet quality standards set by OPSS, and get HMRC approval to account for excise duty on the mineral oils you produce. Test and report your fuel to OPSS, and register with HMRC to pay duty when fuel leaves your site.

  • Test petrol and diesel to meet sulphur and composition limits set by law
  • Report results to the Office for Product Safety and Standards (OPSS)
  • Register or get approval from HMRC as a fuel producer
  • Account for excise duty when fuel is delivered for home use
  • Keep records of fuel movements and duty payments
  • Mark rebated fuels (like red diesel) and follow use rules
  • Supplying non-compliant fuel is an offence – OPSS can take action
  • Producing fuel without HMRC approval can lead to penalties or prosecution
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Related guides in Business Tax Overview

Running a safe installation is one half of the job; the other is meeting the rules that attach to the fuels themselves. Two regimes bear on what you produce: the quality standards that road-fuel petrol and diesel must meet, and the excise duty that the mineral oils you make attract. They are overseen by different bodies — the Office for Product Safety and Standards (OPSS) for fuel quality, and HM Revenue & Customs (HMRC) for duty — so work through both.

A. Meet the motor fuel quality standards

Petrol and diesel placed on the market for use in road vehicles must meet the statutory environmental quality standards — limits on sulphur content and other composition parameters — under the Motor Fuel (Composition and Content) Regulations. You must make sure the fuel you supply conforms, sample and test to demonstrate it, and report as the regime requires. The standards apply in Great Britain, with equivalent rules in Northern Ireland; the Office for Product Safety and Standards (OPSS) operates the fuel quality monitoring scheme.

B. Account for hydrocarbon oil duty

The mineral oils you produce — petrol, diesel, kerosene, fuel oils and similar hydrocarbon oils — are subject to excise duty under the Hydrocarbon Oil Duties Act 1979. As a producer you must be approved or registered with HMRC, hold and operate the oils in duty-suspension arrangements where they apply, account for the duty, and keep the records HMRC's excise controls require, including the marking of rebated fuels and the movement-control rules for duty-suspended goods. The duty point generally arises when the oil is set aside for use or leaves duty suspension. The duty applies across the United Kingdom and is administered by HMRC.

  1. 1

    1. Make your fuels to the quality standards

    Ensure petrol and diesel meet the statutory sulphur and composition limits under the Motor Fuel (Composition and Content) Regulations; sample, test and report to demonstrate conformity to OPSS.

  2. 2

    2. Get HMRC approval and account for duty

    Register or get approval with HMRC as a producer of hydrocarbon oils, operate duty-suspension arrangements where they apply, account for the duty, mark rebated fuels, and keep the records HMRC's excise controls require.

What to do next

With your safe-installation spine and your fuel-quality and duty obligations in place, confirm the whole picture with the coke and petroleum manufacturer compliance checklist. Start from the router if you are not sure which guides apply to you.

Official sources

Authoritative fuel-quality and excise-duty guidance.