Biofuel differentiator will impact pump price of diesel

On top of the staggered 3p/litre increase, the removal of the 20p/litre tax differential on bio-diesel from today (1 April) will also have an effect on the price hauliers pay for diesel.

Vanessa Guyll, technical specialist for fuels, safety and environment at the AA, says: "With the loss of the differentiator, the cost of biodiesel will jump from 36.19p/litre to 57p/litre and fuel suppliers will have to cover the cost of biofuel that's used as a blend in regular diesel."

Under the government's Renewable Transport Fuel Obligation (RTFO), all diesel has to include a 5% blend of biodiesel so the loss of the biofuel differentiator will result in an extra 1p/litre duty rate being added onto regular diesel.

A spokesman for BP tells CM that its pump price varies from site to site, but the company would aim to be competitive at all its outlets.