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HMRC internal manual

Oils Technical Manual

HM Revenue & Customs
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Operations in warehouse: Additives: Additives: Chemical inhibitors

At very low temperature gas oil (including winter-grade DERV) is subject to “waxing” which can immobilise diesel engines. This is even more so when there is a biodiesel component in bioblend, or with pure biodiesel. To lower the temperature at which this occurs, oil companies add chemical inhibitors known as “middle distillate flow improvers.”

These chemical inhibitors normally consist of a solution of the chemical in kerosene, aromatic naphtha or other mineral oil. All such additives are liable to excise duty.

The addition of kerosene as a flow extender is no longer allowed except in exceptional circumstances and only following prior authorisation by HMRC.

The presence in gas oil of the above chemical inhibitors does not diminish the effectiveness of tests for the statutory markers. They may be added to duty-suspended tanks of gas oil (including DERV) in producers’ premises or warehouse. On delivery to home use, duty must be paid on the full quantity, including the additives, at the appropriate rate.

The price of the chemical inhibitors (usually more than twice the cost of road fuel) and the low recommended rates of addition make them uneconomic as fuel extenders. They may also be added out of duty-suspended installations to storage tanks or vehicle tanks, in which case the duty liable on them under the Hydrocarbon Oil Duties Act 1979, Section 6A will be charged by the supplier who sets aside such chemicals for engine additive use.

It is sometimes necessary to dilute the more viscous types of chemical inhibitors with kerosene or naphtha to make them ‘miscible’ at normal temperatures. Such mixing is permitted in producers premises, or in a duty-suspended warehouse, but only if the resulting product is classifiable as an oil or fuel additive or substitute within the terms of the Hydrocarbon Oil Duties Act 1979, Section 6A; dilutions in other circumstances must take place outside duty-suspended installations, using duty-paid oil.