HM Treasury has made S.I. 2026/555, the Excise Duties (Surcharges or Rebates) (Hydrocarbon Oils etc.) (Amendment) Order 2026. The statutory instrument was made on 21 May 2026, laid before the House of Commons on 22 May 2026 and is due to come into force on 15 June 2026. Its practical effect is twofold. It keeps the current fuel duty freeze in place for a further four months, and it increases the temporary rebate adjustment for certain rebated fuels, including red diesel, from mid-June. In practical terms, the measure provides continuity rather than a fresh redesign of hydrocarbon oil duty rates. Businesses operating on the basis of the current adjusted duty rules now have a clear year-end date of 31 December 2026, while eligible users of rebated gas oil, qualifying kerosene, biodiesel and bioblend will see a larger temporary rebate during the same period.
The legal mechanism matters because the 2022 order cannot remain in force indefinitely. Under section 2(2) of the Excise Duties (Surcharges or Rebates) Act 1979, an order made under these powers expires after one year unless a further order continues it. That is why the 2022 instrument has already been carried forward several times, first by S.I. 2023/329, then S.I. 2024/300, S.I. 2025/228 and most recently S.I. 2026/164. This latest amendment changes the end-date in the current 2026 continuation order from 31 August 2026 to 31 December 2026. It also deletes paragraph (3), omits articles 4 to 7, and updates headings in articles 8 to 11 so that references to 1 December 2026 become 1 January 2027. The result is that the existing 2022 regime remains legally in force through the end of the calendar year without the need for a replacement order.
The more material change for eligible rebated fuel users sits in article 3. In the 2022 order, Table C sets the adjustment to rebate rights for specific products. This amending instrument raises the percentage in column (C) from 2.05 to 9.96 for rows (b), (c), (f) and (g), covering gas oil, kerosene to which section 13AA of the Hydrocarbon Oil Duties Act 1979 applies, biodiesel and bioblend. At the same time, it revises the corresponding figure in column (D) from 0.1018 to 0.0648 so that the table shows the corrected duty amount after the adjustment. That change applies to duty charged on or after 15 June 2026 and lasts until the 2022 order ceases to have effect at the end of 31 December 2026. The Explanatory Note describes this as a temporary further reduction to the rebated rate for red diesel. For operators that still qualify for rebated fuel, the effect is a lower effective excise burden during the second half of the year.
The drafting is technical because the Treasury is not rewriting the base duty rates in the Hydrocarbon Oil Duties Act 1979. Instead, it is using the adjustment powers in the Excise Duties (Surcharges or Rebates) Act 1979 to alter what is ultimately payable, or what may be reclaimed by way of rebate, through a percentage deduction or addition. The Explanatory Note states that these adjustments are capped at no more than 10 per cent. This distinction matters for finance teams and compliance advisers. The rebate is calculated by reference to the statutory duty rate set in the Oil Act, not by applying a second adjustment to an already-adjusted figure. That is why the order changes both the percentage addition and the displayed post-adjustment amount in Table C. The amendment is therefore a rate-management measure within the existing statute, rather than a permanent change to the Oil Act itself.
The continuation of the fuel duty freeze has a broad effect because it preserves the present adjusted duty treatment for liquid fuels charged under the Hydrocarbon Oil Duties Act 1979 through to the end of December 2026. That gives fuel suppliers, wholesalers, retailers and large fuel users a longer period of certainty when setting prices, budgets and contractual assumptions for the remainder of the year. The more targeted effect is on sectors and operators that remain entitled to rebated fuel after the post-2022 restriction of red diesel use. Those users will need to check from 15 June 2026 that invoicing, duty accounting and rebate calculations reflect the higher 9.96 per cent adjustment for the relevant products. The change does not widen eligibility. It increases the rebate only for products and uses that already fall within the lawful rebated regime.
There are also several timing points that businesses will need to note. The order was made on 21 May 2026, laid before the House of Commons on 22 May 2026 and comes into force on 15 June 2026. Article 1 makes clear that the rebate amendment in article 3 applies only to products charged with duty on or after that commencement date, so businesses should avoid applying the revised figures to earlier transactions. The instrument was signed by Taiwo Owatemi and Gen Kitchen as two of the Lords Commissioners of His Majesty’s Treasury. A Tax Information and Impact Note is due to be published alongside the amended fuel duty rates material for 2026 to 2027. That should give a fuller statement of expected administrative and sector effects, but the legal position on timing and rates is already set by the order itself.
For policy readers, the main point is that this is a continuation instrument with a targeted rebate adjustment, not a wholesale rewrite of fuel duty policy. The Treasury has used the annual continuation mechanism to keep the 2022 order alive until 31 December 2026 while adding a larger temporary rebate for certain rebated fuels from 15 June. Unless a further order is made, the current temporary regime will then fall away at the start of 1 January 2027. Between now and year-end, the immediate compliance position is clear: organisations should work on the basis that the fuel duty freeze remains in place, and that qualifying rebated fuels will attract the revised rebate figures set out in the amended Table C.