The Hydrocarbon Oil (Marking) Regulations 2002

Made: 16th July 2002

Laid before Parliament: 16th July 2002

Coming into force: 1st August 2002

The Commissioners of Customs and Excise, in exercise of the powers conferred on them by sections 24(1) and 24A(3) of, and Schedule 4 to, the Hydrocarbon Oil Duties Act 1979; and additionally, being a department designated for the purposes of section 2(2) of the European Communities Act 1972 in relation to excise matters of the European Communities, in exercise of the powers conferred by that section, and of all other powers enabling them in that behalf, hereby make the following Regulations:

PART I — PRELIMINARY

Citation and commencement

1

These Regulations may be cited as the Hydrocarbon Oil (Marking) Regulations 2002 and come into force on 1st August 2002.

Interpretation

2

• (1) In these Regulations—

• “the Act” means the Hydrocarbon Oil Duties Act 1979;

• “ASTM” means American Society for Testing and Materials;

• “biodiesel excise duty point” means the excise duty point which applies for biodiesel by virtue of regulation 17 (excise duty points) of the Biofuels and Other Fuel Substitutes (Payment of Excise Duties etc) Regulations 2004;

• ...

• ...

• “the common United Kingdom fiscal marker” means ((3-(sec-butyl)-4-(decyloxy)phenyl)methanetriyl)tribenzene;

• “coumarin” means 1,2-benzopyrone;

• “dark oil” means heavy oil that is darker than ASTM colour 3.0 in the Table of Glass Colour Standards included in “Standard method of Test for ASTM Colour of Petroleum Products” adopted as a joint ASTM-IP standard with ASTM designation D 1500-98 and IP designation IP 196/97, which appears in “IP Standard Methods”, when the heavy oil and ASTM Colour 3.0 are compared in the manner described in that publication for that method of test;

• “duty” means the excise duty charged on hydrocarbon oil by section 6(1) of the Act or, as the case may be, on bioblend under section 6AB of the Act;

• ...

• “the general marker” means N-Ethyl-N-[2-(1-isobutoxyethoxy)ethyl]-4-(phenylazo)aniline;

• “IP” means Institute of Petroleum;

• “IP Standard Methods” means “IP Standard Methods for Analysis and Testing of Petroleum and Related Products and British Standard 2000 Parts 2002”, 61st edition, May 2002, published by the Institute of Petroleum, ISBN 0 85293 348 7;

• “kerosene” means heavy oil of which more than 50% by volume distils at a temperature not exceeding 240°C;

• “marker” means, except where the context requires otherwise, a marker or colouring substance prescribed by these Regulations and includes, in regulation 10, a composite solution of the type referred to in regulation 9;

• “oil” means hydrocarbon oil;

• “quinizarin” means 1,4-dihydroxyanthraquinone;

• “solvent orange” means 1-[(2-methylphenyl)azo]-2-naphthol;

• “solvent red” means a dye that consists of at least 50% 1-(2-methyl-4-(2-methylphenylazo)phenylazo)-2-naphthol, with any remainder consisting of one or more of—1-(4-(phenylazo)phenylazo)-2-naphthol;1-[[3-methyl-4-[(3-methylphenyl)azo]phenyl]azo]-2-naphthol;1-[[2,5-dimethyl-4-[(2-methylphenyl)azo]phenyl]azo]-2-naphthol;1-[[4-[(dimethylphenyl)azo]dimethylphenyl]azo]-2-naphthol.

• (2) Any reference in these Regulations to marked oil or bioblend means oil or bioblend to which a marker has been added and related expressions must be construed accordingly.

PART II — REQUIREMENT TO WORK

Prescribed markers and colouring substance

3

• (1) The following markers and colouring substance are prescribed by these Regulations—

• (a) for gas oil , biodiesel and light oil, the markers described in paragraph (2)(a), (b), (d) and (e) and the colouring substance described in paragraph (3);

• (b) for kerosene, the markers described in paragraph (2)(a), (c), (d) and (e) ;

• (c) for bioblend that is a mixture of biodiesel and gas oil, the markers described in paragraph (2)(a), (b), (d) and (e) and the colouring substance described in paragraph (3);

• (d) for bioblend that is a mixture of biodiesel and kerosene, the markers described in paragraph (2)(a), (c), (d) and (e).

• (2) The markers are—

• (a) the general marker added in the proportion of not less than 3 kilograms per 1,000,000 litres of oil;

• (b) quinizarin added in the proportion of not less than 1.75 kilograms per 1,000,000 litres of oil;

• (c) coumarin added in the proportion of not less than 2 kilograms per 1,000,000 litres of oil;

• (d) the common United Kingdom fiscal marker added in the proportion of not less than 2.5 kilograms per 1,000,000 litres of oil;

• (e) n-butyl phenyl ether added in the proportion of not less than 9.5 kilograms and not more than 14.25 kilograms per 1,000,000 litres of oil.

• (3) The colouring substance is not less than 4 kilograms of solvent red per 1,000,000 litres of oil and not less than 0.4 kilograms of solvent orange per 1,000,000 litres of oil.

• (4) For the purposes of paragraph 1(c), the proportions described in regulation 3(2)(a), (b), (d) and (3) apply as if the bioblend consisted entirely of gas oil.

• (5) For the purposes of paragraph 1(d), the proportions described in regulation 3(2)(a), (c) and (d) apply as if the bioblend consisted entirely of kerosene.

Marking required for rebate

4

Subject to Part III (exceptions to marking requirements), no rebate of duty shall be allowed—

• (a) on the delivery for home use of—

• (i) gas oil under section 11(1)(b) of the Act;

• (ii) kerosene under section 11(1)(c) or 13AA(1) of the Act; or

• (iii) light oil under section 14(1) of the Act; or

• (b) for biodiesel under section 14A of the Act, at the biodiesel excise duty point,

unless there is added to the oil or biodiesel, in accordance with these Regulations, the markers and, except in the case of kerosene, the colouring substance, prescribed by regulation 3.

Marking required for delivery of oil without payment of duty

5

Subject to Part III (Exceptions to marking requirements), the Commissioners may not permit any gas oil or kerosene to be delivered for home use without payment of duty on that oil under section 9 of the Act , unless there is added to the oil, in accordance with these Regulations, the markers and, in the case of gas oil, the colouring substance, prescribed by regulation 3.

PART III — EXCEPTIONS TO MARKING REQUIREMENTS

Commissioners’ power to waive marking

6

The Commissioners may waive the requirements of regulations 4 and 4A (marking required for rebate) and regulation 5 (marking required for delivery of oil without payment of duty) only where they are satisfied that it is necessary for technical reasons or for reasons of public health or safety.

PART IV — TIME AND MANNER OF MARKING

Application

7

This Part applies for the purpose of determining the time and manner in which any oil , biodiesel or bioblend required to be marked by these Regulations is to be marked.

Time of marking

8

Except as otherwise provided in regulations made by the Commissioners—

• (a) oil and bioblend must be marked before delivery for home use of that oil and bioblend; and

• (b) biodiesel must be marked before the biodiesel excise duty point arises.

Use of composite solution

9

Any oil , biodiesel or bioblend may be marked by the addition to it of a solution containing the markers.

PART V — STORAGE, LABELLING ETC

Storage of markers

10

• (1) The occupier of any premises where marking occurs must keep any marker—

• (a) separately from all other substances; and

• (b) except when removed for immediate use, in containers bearing a description of their contents.

• (2) At the end of each month, the occupier of any premises where marking occurs must—

• (a) take stock of the markers that he stores for use or that are in use at those premises;

• (b) make a written record of that stocktake;

• (c) preserve that written record for not less than 6 years.

Storage of marked oil

11

Marked oil , biodiesel or or bioblend must be stored separately from unmarked oil or bioblend.

Labelling of delivery points for marked oil

12

Any drum, storage tank or other container or any delivery pump or pipe must bear an indelible notice to the effect that—

• (a) where it contains, or is an outlet for, any gas oil , biodiesel or kerosene marked under regulation 4 (marking required for rebate), such oil , biodiesel is not to be used as fuel other than for an excepted machine;

• (aa) where it contains, or is an outlet for, any bioblend marked under regulation 4A (marking required for rebate on bioblend), such bioblend is not to be used as fuel other than for an excepted machine;

• (b) where it contains, or is an outlet for, any light oil marked under regulation 4 (marking required for rebate), such oil is to be used only as furnace fuel;

• (c) where it contains, or is an outlet for, any oil marked under regulation 5 (marking required for delivery without payment of duty), such oil is not to be used as fuel for any engine, motor or other machinery or as heating fuel.

Particulars to be recorded on delivery notes

13

• (1) Any person who supplies—

• (a) gas oil or biodiesel marked under regulation 4 (marking required for rebate); ...

• (b) a quantity ... exceeding two hundred and fifty litres of kerosene, marked under regulation 4 (marking required for rebate); or

• (c) bioblend marked under regulation 4A;

must provide to the recipient a delivery note bearing a statement to the effect that such oil or, as the case may be, biodiesel or bioblend is not to be used as fuel other than for an excepted machine.

• (2) Any person who supplies light oil marked under regulation 4 (marking required for rebate) must provide to the recipient a delivery note bearing a statement to the effect that such oil is only to be used as furnace fuel.

• (3) Any person who supplies oil marked under regulation 5 (marking required for delivery for home use without payment of duty) must supply to the recipient a delivery note bearing a statement to the effect that such oil is not to be used as fuel for any engine, motor or other machinery or as heating fuel.

PART VI — PROHIBITIONS

Prohibitions relating to prescribed markers

14

• (1) No oil , biodiesel or bioblend may be marked except in the circumstances prescribed by these Regulations.

• (2) No marker may be removed from any oil , biodiesel or bioblend.

• (3) No substance calculated to impede the identification of any marker may be added to any oil , biodiesel or bioblend.

Prohibition relating to other markers

15

• (1) No person may add any chemical identifier or dye other than a marker or n-butyl phenyl ether to any gas oil, kerosene , biodiesel or bioblend required by these Regulations to be marked (other than gas oil, kerosene, biodiesel or bioblend to which regulation 6 applies).

• (2) Where any person contravenes this regulation, his contravention shall attract a penalty under section 9 of the Finance Act 1994 (civil penalties) and any oil or, as the case may be, biodiesel or bioblend to which such a chemical identifier or dye has been added shall be liable to forfeiture.

Prohibition on importation of certain oil

16

No oil , biodiesel or bioblend of a description required by these Regulations to be marked may be imported where there has been added any substance calculated to impede the identification of any marker.

Prohibition on the sale of dark oil

17

No dark oil may be sold as fuel other than for an excepted machine.

PART VII — AMENDMENTS, OMISSIONS AND REVOCATIONS

The Hydrocarbon Oil Regulations 1973

18

• (1) Amend the Hydrocarbon Oil Regulations 1973 as follows.

• (2) In regulation 2, omit—

• (a) the definition of “dark oil”; and

• (b) the definition of “the duty deferment regulations”.

• (3) For paragraph (1)(f) and paragraph (2)(b) of regulation 12 (delivery notes), substitute “if the oil is required by the Hydrocarbon Oil (Marking) Regulations 2002 to be marked, the statements required by regulation 13 of those Regulations”.

• (4) Omit regulations 17 to 30A.

The Hydrocarbon Oil (Designated Markers) Regulations 1996

19

• (1) Amend regulation 2 (designation of markers) of the Hydrocarbon Oil (Designated Markers) Regulations 1996 as follows.

• (2) In regulation 2(2)—

• (a) for the second designated marker, substitute—

• (b) omit the third designated marker.

Revocations

20

• (1) Revoke the Hydrocarbon Oil (Amendment) Regulations 1985 .

• (2) Revoke the Hydrocarbon Oil (Amendment) (No. 2) Regulations 1994 .

Signed

M J Eland — Commissioner of Customs and Excise — 2002-07-16

Explanatory note

(This note is not part of the Regulations)

Purpose of the RegulationsThese Regulations require the marking of gas oil, kerosene and light oil with one or more chemical markers and colouring substance as a condition of allowing specified rebates of, and, in the case of gas oil and kerosene, relief from, excise duty on that oil under specified provisions of the Hydrocarbon Oil Duties Act 1979 (c.5) (“the Act”). The Regulations prescribe the markers and colouring substance and permit the Commissioners to waive the marking requirement in certain circumstances. The Regulations also prescribe the time and manner of marking and impose requirements as to the storage and labelling of containers of markers and marked oil. The Regulations also prohibit certain activities in relation to markers and marked oil.

ato prescribe an additional chemical marker, known as the common fiscal marker;

bto require gas oil and kerosene that is delivered for home use without payment of excise duty under section 9 of the Act to be marked and to impose consequential requirements as to labelling of such oil and wording of delivery notes;

cto permit the Commissioners to waive the requirement to mark oil only in certain circumstances.

dto prohibit the addition of any chemical identifier or dye other than a marker to gas oil and kerosene required to be marked by the Regulations.

Content of the RegulationsRegulation 1 provides for citation and commencement.

Footnotes

[^f00001]: 1979 c. 5; section 24 was amended by the Finance Act 1981 (c. 35), section 6(2), the Finance Act 1982 (c. 39), section 4(3), the Finance Act 1987 (c. 16), section 1(2), the Finance Act 1994 (c. 9), Schedule 4, paragraph 58, the Finance Act 1996 (c. 8), section 5(5) and section 7(2) and Schedule 41, Part I, the Finance Act 1997 (c. 16), section 7(7) and Schedule 6, paragraph 6(6), the Finance Act 2000 (c. 17), section 10(4) and by the Finance Act 2001 (c. 9), section 3(2); section 24A(3) was inserted by the Finance Act 1996, section 7(1); Schedule 4 was amended by the Finance Act 1981, section 6(3), the Finance Act 1982, section 4(6) and by the Finance Act 1996, Schedule 41, Part I; section 1(2) defines “hydrocarbon oil”; section 27(3) applies the definition of “the Commissioners” in section 1(1) of the Customs and Excise Management Act 1979 (c. 2); section 27(3) was amended by the Finance Act 1985 (c. 54), Schedule 4, paragraph 3 and the Finance Act 1997 (c. 16), Schedule 6, paragraph 6(7).

[^f00002]: S.I. 1980/865.

[^f00003]: 1972 c. 68.

[^f00004]: Section 6(1) was amended by the Finance Act 1981 (c. 35), section 4, the Finance Act 1982 (c. 39), section 4, the Finance Act 1989 (c. 26), section 1, the Finance Act 1990 (c. 29), Schedule 19, Part I, the Finance Act 1997 (c. 16), section 7 and the Finance Act 1998 (c. 36), section 6.

[^f00005]: Section 12 was amended by the Finance Act 1996 (c. 8), section 5.

[^f00006]: Relevant amendments to section 11 are the Finance Act 1986 (c. 41), section 2, the Finance Act 1996 (c. 8), section 5, the Finance Act 1997 (c. 16), section 7 and Schedule 18, Part I and the Finance Act 2000 (c. 17), section 10.

[^f00007]: Section 13AA(1) was inserted by the Finance Act 1996, section 5.

[^f00008]: Section 9 was amended by the Excise Duty (Amendment of the Alcoholic Liquor Duties Act 1979 and the Hydrocarbon Oil Duties Act 1979) Regulations 1992 (S.I. 1992/3158), regulation 3.