The Treasury has made a further statutory instrument to keep current fuel duty arrangements in place for another four months and to deepen the temporary rebate adjustment for red diesel and related fuels. S.I. 2026/555 was made on 21 May 2026, laid before the House of Commons on 22 May 2026 and comes into force on 15 June 2026. The Order operates under the Excise Duties (Surcharges or Rebates) Act 1979 and applies to products charged with duty under the Hydrocarbon Oil Duties Act 1979 on or after 15 June. In practical terms, it extends the existing fuel duty freeze to 31 December 2026 and changes the rebate figures used for certain rebated fuels.
The legal mechanism is technical but important. Article 2 amends the temporary continuation order made earlier in 2026 so that the 2022 hydrocarbon oils order now remains in force until the end of 31 December 2026 rather than expiring on 31 August 2026. To achieve that, the instrument replaces the August end date with December in the operative provisions, removes paragraph (3) of article 1, omits articles 4 to 7, and moves later date references from 1 December 2026 to 1 January 2027. These are consequential drafting changes, but the policy effect is straightforward: the present duty adjustment framework is carried through to the end of the calendar year.
Article 3 deals with the rebate side of the regime. It amends Table C in article 4 of the 2022 Order for gas oil, kerosene to which section 13AA of the Oil Act applies, biodiesel and bioblend. For the relevant rows, the rebate adjustment figure in column (C) rises from 2.05 to 9.96, while the corresponding duty-payable figure in column (D) changes from 0.1018 to 0.0648. The Explanatory Note states that this amounts to a temporary further reduction to the rebated rate for red diesel. It also says the column (D) figure has been updated so that the table shows the duty payable after the adjustment has been applied, which should reduce ambiguity for operators calculating what is actually due.
The background matters because these orders are time-limited. Section 2(2) of the 1979 Act provides that an order made under section 1 ceases after one year unless it is continued by a further order. That is why the 2022 instrument has required repeated continuation through S.I. 2023/329, S.I. 2024/300, S.I. 2025/228 and the earlier 2026 order. The latest instrument therefore does not create a new fuel duty structure from first principles. It preserves an existing temporary scheme, using the continuation power that Parliament has already set out in primary legislation. The Explanatory Note adds that all of the adjustments remain within the statutory limit of a deduction from duty, or an addition to rebate, of no more than 10 per cent.
For taxpayers, suppliers and finance teams, the compliance point is the effective date. The new rebate figures apply in relation to products charged with duty on or after 15 June 2026, not retrospectively. Systems that calculate excise liabilities, rebate entitlements and stock movements will therefore need to distinguish clearly between transactions before and after that date. The drafting note at the end of the instrument is also relevant for rebate claims. It explains that the adjusted rebate is calculated by reference to the underlying rate in the Hydrocarbon Oil Duties Act 1979, not by reference to that rate after any separate duty adjustment has been made. That matters for organisations still entitled to rebated fuel, because it affects how the reclaim is derived in law.
For motorists and most businesses using fully taxed road fuels, the immediate effect is continuity rather than a new charge. The current fuel duty freeze remains in place until 31 December 2026, avoiding the expiry that had previously been scheduled for 31 August. For eligible users of rebated gas oil and similar products, the measure provides a larger temporary rebate adjustment for the same period. The Order was signed by Taiwo Owatemi and Gen Kitchen as Lords Commissioners of His Majesty’s Treasury. A Tax Information and Impact Note is due to be published separately on the government website and should set out the fiscal, operational and sector effects in more detail. Unless a further continuation or replacement measure is made, the amended 2022 Order is now set to cease at the end of 31 December 2026.