Tim’s take:
Fuel is the input cost nobody budgets honestly, because nobody knows where it will be by drilling, let alone by next harvest. Pump diesel has put on 8p a litre in a fortnight, the tank in the yard needs filling before autumn work, and half the industry seems not to have noticed that the duty on red diesel was quietly cut in June and goes back up in the new year. The moving parts are below, with the dates that matter.
What does red diesel cost in 2026?
There is no official national price for red diesel the way there is for pump fuel. Distributors quote day by day against wholesale gas oil, and two farms ten miles apart can be offered different numbers on the same morning depending on volume and delivery run. What you can pin down is the published benchmark and the fixed components of every quote.
The benchmark: average pump diesel stood at 181.97p a litre in the week beginning 10 August 2026, up from 173.97p two weeks earlier, on the government’s weekly road fuel price series. Red diesel is the same base product carrying 46.47p a litre less duty, which is why it lands so far below the forecourt number. When the pump price moves 8p in a fortnight, your next red diesel quote is moving with it.
The duty numbers, and the dates they change
Duty is the part of the price that is set in legislation, and the current numbers are unusual. The Treasury’s amended fuel duty rates for 2026 to 2027 cut the rebated gas oil rate to 6.48p a litre from 15 June 2026, but only until 31 December 2026. From 1 January 2027 it returns to 10.76p, and from 1 March 2027 to 11.14p.
| Period | Red diesel duty (p/litre) | Road diesel duty (p/litre) |
|---|---|---|
| To 31 December 2026 | 6.48 | 52.95 |
| From 1 January 2027 | 10.76 | 55.95 |
| From 1 March 2027 | 11.14 | 57.95 |
Read the two columns together and the direction of travel is plain: both rates step up in January and again in March. On red diesel the January step alone is 4.28p a litre. A farm that takes a 5,000-litre winter delivery in December rather than January keeps around £214 of that difference, before any movement in the wholesale price helps or hurts. That is arithmetic, not a forecast, and the usual caveat applies: a Budget between now and then can rewrite the table.
Who can still use it
The April 2022 reform took red diesel away from most of the economy. Under the current entitlement rules, vehicles and machinery used in agriculture, horticulture, fish farming and forestry keep it, and agricultural vehicles can also run rebated fuel while cutting verges and hedges, clearing snow or gritting roads. Rail, non-commercial heating, community sports grounds, fishing and water freight, and travelling fairs round out the list.
Construction, plant hire, haulage and quarrying all lost their entitlement, which is why a digger on a farm job and the same digger on a building site can be legally required to run different fuel. If a contractor’s machine turns up on your holding, whose diesel goes in it and for what work is worth agreeing before the tank is opened, not after.
VAT: the 2,300-litre line
VAT on red diesel has its own quirk. Under VAT Notice 701/19, any supply of up to 2,300 litres of gas oil is charged at the reduced 5% rate regardless of what it is for. Larger deliveries are reduced-rated only for qualifying uses such as domestic heating; otherwise the standard 20% applies. For a VAT-registered farm the rate is a cash flow question rather than a cost, but it changes what the invoice says a litre costs, and it catches people comparing quotes split across different delivery sizes.
Reading a quote
A red diesel quote is wholesale gas oil, plus the distributor’s margin and delivery, plus 6.48p duty, plus VAT at whichever rate the delivery size triggers. The wholesale leg is the volatile one, and it follows the same crude and refining pressures as the forecourt price, so the weekly pump series is the free early warning: if it has climbed for three straight weeks, ring for the winter order sooner rather than later. Fuel sits alongside iron in the running costs that decide whether a machine earns its keep; our machinery costs and depreciation guide works through that arithmetic, and our farm prices guide covers the output side of the ledger.
Frequently asked questions
How much is red diesel per litre in the UK?
There is no official national red diesel price; distributors quote daily against wholesale gas oil. The fixed parts are duty at 6.48p a litre until 31 December 2026 and VAT at 5% on deliveries up to 2,300 litres. Pump white diesel, the published benchmark, averaged 181.97p a litre in the week beginning 10 August 2026.
Who can still use red diesel?
Vehicles and machinery in agriculture, horticulture, fish farming and forestry, plus rail, non-commercial heating, community sports grounds, fishing and water freight, and travelling fairs. Agricultural vehicles can also use it for verge and hedge cutting, snow clearance and gritting. Construction, haulage and plant hire lost entitlement in April 2022.
What is the duty on red diesel in 2026?
6.48p a litre from 15 June 2026 to 31 December 2026, returning to 10.76p from 1 January 2027 and 11.14p from 1 March 2027. Road diesel duty is 52.95p over the same period, rising to 55.95p and then 57.95p.
What VAT is charged on red diesel?
Deliveries up to 2,300 litres carry the reduced 5% rate regardless of use. Larger supplies are reduced-rated only for qualifying uses such as domestic heating, and red diesel used as road fuel is always standard-rated at 20%.
