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HMRC internal manual

Oils Technical Manual

HM Revenue & Customs
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Measurement: background


It is important to remember that essentially no measurement method can be 100% accurate, and that the environment in which they are operating can affect the accuracy of all means of measurement.

Duty is charged on the volume of oil.

However, oil changes density with temperature, so as its temperature increases, the same amount of oil will take up more space or volume.

To measure oil consistently for duty purposes, the volume must therefore be calculated at a single temperature.

Accounting for oil

Oil is accounted for by what is known as standard temperature accounting (STA) - the volume the oil would take up at 15ºC whether or not the oil is actually at 15ºC at the time it is measured. Only metric units (litres) can be used. (See paragraph 16.15.1.).

The volume expressed in litres at 15ºC is known as standard litres.

The volume of the oil to be accounted for at its actual temperature, at the time of measurement, is known as bulk litres (or as ‘observed’ or ‘measured’ litres).

Principles of measurement

The principle of measuring, laid down in Notice 179, is that the trader uses the most accurate method available to them. If this fails, we may allow a less reliable method to be used; however the trader cannot then just pick and choose a method to suit themselves, and there must be safeguards in place to protect the duty and to prevent any revenue loss where the trader chooses to use an alternative method.

Metering for large oil companies is increasingly linked to computer systems and has a high degree of automation, removing many of the physical checks that used to be carried out.

However as there are a growing number of bio-diesel and other fuel substitute producers registering premises for small scale production, the use of physical checks may become increasingly important.