Introduction and overview of oils activity: background to UK oils activity: Movement of products
In the UK unlike the rest of the EU, most oil products move duty paid rather than duty-suspended beyond the place of their production (refinery).
However some oils are controlled beyond the duty point, under the Tied Oils (oils put to certain industrial use) and Registered Dealer in Controlled Oil (RDCO) schemes until they are accounted for by being put to an eligible use, as they are fully/partially ‘rebated’ or relieved of duty.
Oils supplied duty-suspended either for export or to other EU countries are also controlled until they have been delivered.
Motor and heating fuels are normally moved either fully duty paid or partially relieved of duty by having been ‘rebated’ at the duty point. This is usually a meter at the boundary of the warehouse, which may be either at an intake into a pipeline or at a supply point on a gantry.
The majority of finished product in the UK moves either by pipeline or ship. Half the products move by pipeline, as this is by far the most cost effective way of moving bulk, whilst over a quarter moves by short-sea shipping.
Whilst pipelines carry products beyond the duty point, which are mainly duty paid, some of the oil carried may be instead either partly or fully rebated, and thus relieved of a proportion of excise duty.
Aviation Turbine Fuel (AVTUR) is supplied fully rebated for aircraft use, but remains liable for duty until such time as it is put to eligible use. Other fuels are controlled because they have been marked and rebated, and supplied at a reduced duty rate on the understanding that they are not put to use as either road fuels. This includes marked gas oil (MGO) or ‘red diesel’, marked kerosene (MKO) and light oil supplied as furnace fuel (LOFF).