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The Chancellor of the Exchequer's Pre-Budget Report presented to Parliament on 5 December 2005 contains the following news at para 7.5.
"The UK has a number of exemptions from the Energy Products Directive that enable duty to be charged at a reduced rate on oils where they are put to certain uses. These exemptions are due to expire at the end of 2006. While more information will be required to inform the case the UK makes to the European Commission, the Government is minded to apply for an extension of the derogations for fuel used in private air and pleasure craft navigation, liquified petroleum gas (LPG) and natural gas (NG) used as motor fuel, and waste oils reused as fuel. The Government will issue an initial regulatory impact assessment on the effects of ending the derogation for private pleasure craft early next year. This document will then be used as the basis for further information gathering and discussions."
The RYA, the British Marine Federation, the Inland Waterways Association and the Federation of Petroleum Suppliers have campaigned for this commitment and have welcomed the Government's statement. It is true the cost of all oils has risen significantly in 2005. If the derogation for private pleasure craft is lost after 2006, diesel powered pleasure craft, the majority, would need to find supplies of road diesel. Even if road diesel is made available in port areas, in addition to the red diesel which will continue to be used by commercial craft, the relatively small quantites sold through these outlets will mean premium prices, higher than practically anywhere else in Europe.