HM Treasury has made a further excise order to keep temporary fuel duty arrangements in place beyond the summer and to increase the rebate available on certain rebated fuels. The Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Amendment) Order 2026 was made on 21 May 2026, laid before the House of Commons on 22 May 2026, and comes into force on 15 June 2026. According to the Order’s Explanatory Note, the instrument does two things. It extends the current fuel duty freeze to the end of 31 December 2026, and it makes a temporary further reduction to the rebated rate for red diesel-related fuels by adjusting the rebate available on specified products.
The first change is a continuation measure. Article 2 amends the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Temporary Continuation of 2022 Order and Adjustments) Order 2026 so that the current framework no longer ends on 31 August 2026. The new end date is 31 December 2026. The same article also moves related dates from 1 December 2026 to 1 January 2027 and removes articles 4 to 7 from the earlier 2026 Order. In practical terms, the Treasury has reset the timetable so that the 2022 duty adjustment regime remains in force for the whole of the second half of 2026 rather than falling away at the end of August.
That continuation is not merely administrative. Under section 2(2) of the Excise Duties (Surcharges or Rebates) Act 1979, an order made under the Act expires after one year unless it is continued by a further order. The Explanatory Note records that the 2022 Order has already been kept in force by a sequence of later instruments, including S.I. 2023/329, S.I. 2024/300, S.I. 2025/228 and the earlier 2026 continuation order. For policy readers, that point matters because it explains why a new statutory instrument is required even when the government is largely preserving an existing position. Without a further order, the temporary adjustment mechanism would lapse automatically.
The second change is the substantive rate adjustment. Article 3 amends article 4 of the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) Order 2022. In Table C, for rows (b), (c), (f) and (g), the percentage in column (C) is increased from 2.05 to 9.96, while the figure in column (D) is changed from 0.1018 to 0.0648. The Explanatory Note states that this applies to gas oil, kerosene to which section 13AA of the Hydrocarbon Oil Duties Act 1979 applies, biodiesel and bioblend. The legal effect is to increase the amount of rebate allowable, producing a lower net amount of excise duty payable on those products. This part of the Order has effect for products charged with duty on or after 15 June 2026.
In plain English, the measure gives a larger temporary rebate to operators already entitled to claim rebate on the relevant fuels. It does not create a new category of eligible fuel user, and it does not rewrite the underlying structure of the Hydrocarbon Oil Duties Act 1979. Instead, it alters the temporary percentage adjustment applied under the 1979 surcharges and rebates legislation. The Explanatory Note also makes clear that these adjustments are framed as either a deduction from the amount payable or an addition to the amount of rebate allowable, and that the specified percentage cannot exceed 10 per cent. The new 9.96 per cent figure therefore sits just below that statutory ceiling.
The drafting is technical because the rebate rules sit across two Acts and several linked orders. Section 1(4) of the Excise Duties (Surcharges or Rebates) Act 1979 requires the adjustment of a rebate to be calculated by reference to the underlying duty position, while disregarding any separate adjustment to the liability itself. That is why the Explanatory Note stresses that the revised rebate is calculated from the base rate in the Hydrocarbon Oil Duties Act 1979 rather than from a rate already adjusted by the 2022 Order. For the same reason, the Treasury has updated column (D) of Table C to show the correct duty payable after the adjustment. The note says this has been done for ease of reference and to make the effect of the change easier to follow.
The immediate policy effect is greater short-term certainty. Operators using rebated gas oil and related products now know that the existing duty treatment will continue to the end of December 2026, and that a deeper temporary rebate will apply from 15 June 2026 on the products covered by article 3. That matters for budgeting, procurement and contract pricing, particularly where fuel costs are material and rebate entitlement already exists. It also leaves a clear next decision point: unless the Treasury brings forward another continuation measure, the current 2022 framework will cease to have effect at the end of 31 December 2026. The Explanatory Note says a Tax Information and Impact Note on the instrument will be published alongside the amended fuel duty rates for 2026 to 2027.