17th March 2004

BUDGET ANNOUNCEMENT ON SULPHUR FREE FUELS

The Chancellor in his Budget today announced an incentive for the introduction of sulphur free petrol and diesel (less than 10 parts per million sulphur vs current 50ppm or less) which will carry a duty rate 0.5 pence per litre lower than that applied to current to ultra low sulphur fuels, with effect from 1st September 2004.

Chris Hunt, Acting Director General of UKPIA, in welcoming the reduction, commented  “Our member companies have responded positively in the past to the Government’s desire for the early introduction of ultra low sulphur diesel and petrol (50 ppm maximum sulphur) ahead of the EU mandated timetable, with consequent benefits to UK air quality. Sulphur free petrol and diesel costs more to produce so the Chancellor’s acknowledgment of this fact is welcomed.  UK refiners have had to make substantial investment to produce these new fuels and our member companies will be working hard to ensure that they are introduced within the required timescale outlined in legislation”

The introduction of cleaner fuels over the last decade has enabled the use of new engine and exhaust clean up technologies bringing about a substantial reduction in exhaust emissions.

Sulphur free fuels will optimise the potential benefits of new engine technologies such as petrol direct injection and exhaust de-nox catalyst clean-up technologies, with consequent benefits to fuel efficiency and CO2 reduction.