Construction industry urges for delay on removal of red diesel rebate

The construction industry has spoken out against the removal of the red diesel rebate. 

Industry bodies have warned chancellor Rishi Sunak and business secretary Kwasi Kwarteng that this change next month could threaten construction projects, force house prices up and “risk the viability of local builders”. It is proposed that this is delayed by an extra 12 months. 

Although the sector recognises the importance of seeking more eco-friendly alternatives to promote a sustainable future, it has also noted that biofuel production stagnated due to the pandemic, meaning if a rebate removal goes ahead, white diesel will have to be used instead. 

White diesel is set to be 190% more expensive than red diesel was before the onset of the pandemic. The difference in taxation rates between red and white diesel is around 47p per litre. 

This also coincides with fuel prices increasing due to the Russian invasion of Ukraine. These plans not only have an effect on the construction industry but also customers, who could see house, food and heating costs rise as a knock on effect. 

Rishi Sunak is set to deliver his Spring Statement on March 23rd, which is set to detail more about these plans. The rebate removal is planned to be implemented on April 1st.