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2017 Budget Reaction

November 22, 2017

Today’s budget was a historic event – the first Budget in November but the FPS, the trade association for the oil distribution industry in the UK and Republic of Ireland, hoped that Chancellor Phillip Hammond would reduce fuel duty or vehicle excise duty rates for commercial vehicles.  At the same time the FPS was pleased that the vehicle excise duty for new diesel cars not meeting latest standards was not applied to vans, lorries or tankers.

“The Budget did produce some good news for households but was not very exciting and it also didn’t deliver any great help for many small business owners many of whom are our members,” said FPS President Jodie Allan.

In the run up to the budget, the FPS has been lobbying the Government on various fronts for the off-grid heating oil industry.

The oil and fuel distribution sector is a key but largely un-regarded part of the supply of fuels particularly to customers who are off the gas grid and the FPS had written to ask Mr Hammond to recognise this sector and do more to assist both the homeowners and our members.

Jodie comments: “The FPS represents 80% of heating oil distributors across the UK and our members operate at very low margins and so not raising fuel duty or vehicle excise duty rates for hauliers will assist our members but reducing fuel duty would have helped members further and we also wanted to see additional measures to help the customers of our members – the 1.25 million mainly rural homeowners who are off grid.  Nothing was mentioned in the budget about a boiler scrappage scheme or help for off grid homeowners.

“The Government recently published its Clean Growth Strategy and Boiler Plus initiative as part of its commitment to greener energy.

“Boiler Plus is a great initiative for the replacement of gas boilers and would contribute to meeting the 2032 carbon budget due to the high numbers of boiler replacements each year. However, we’re disappointed that the BEIS has not included a similar strategy for oil boilers within Boiler Plus as it deems the level of replacement boilers too low.

“We would like to see a boiler scrappage scheme for off-grid homes as there are efficient condensing boilers which can be installed either as a replacement or as first-time central heating for customers – and both options would reduce the carbon footprint of the home.

“The FPS will continue to lobby the Government on behalf of its members to introduce a nationwide boiler replacement programme to help the 400,000 households in the UK that rely on standard oil boilers, and enable them to upgrade to the high efficiency condensing boilers.

“A fuel-wide boiler scrappage scheme would help consumers to reduce their energy bills as well as their carbon emissions, and help the Government to reach its carbon budget targets.

“Boiler manufacturers have been developing new boiler types and testing fuels – and we want the Government to support the industry with a boiler replacement scheme for heating oil homeowners.  We were disappointed that the budget did not announce any such measures.”

Oil heating is currently recognised by the independent provider of comparative home heating costs, Sutherland Tables, as being the cheapest form of heating in the UK and has been since January 2015.

“Therefore, a government supported scheme to replace older oil boilers with new, efficient condensing boilers would both reduce consumer heating bills whilst also making a significant contribution to reducing CO2 emissions,” adds Jodie.

She says: “In comparison to de-carbonising the gas network, de-carbonising the oil heating sector should be relatively easy as it’s far smaller. However, this doesn’t mean there can’t be step changes – after all, improving energy efficiency and reducing carbon emissions for off-grid homes is at the core of all we do. And is an issue that needs to be urgently addressed.

“As a sign of how seriously we take this matter, the industry is already looking at the type of fuel that may replace oil one day as a low carbon option.

“We welcome all energy efficiency policy and measures, and the FPS will continue to support such measures and to lobby on further action that must be taken.”

Find out more about the FPS.

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