Industrial Heating Oil and Kerosene Financial Support Scheme & Rebated Fuel Entitlement

Oil Tank

Following the Spring Budget 2023, changes have been announced by the government to aid industrial heating oil (IHO) and kerosene users. Organisations can now apply for support (a fixed £150 payment) towards their energy bills until Friday 28th April for non-domestic properties if your property is not connected to the grid.

Apply here

In addition, rebated kerosene and IHO can now be used for the purpose of heating on business premises.

It must be noted however that IHO is not to be used as fuel for a road vehicle, off-road vehicle, vessel or any other machinery that is not an excepted machine.

At Beesley Fuels, we have broken down the new measures to help you understand how your organisation could benefit.

Update to rebated heating oil entitlement

In April 2022, fuel duty legislation was introduced and resulted in a number of sectors losing their entitlement to use rebated diesel and biofuels, including marked oils. The new updates allow the use of rebated fuels to generate heat for commercial and non-domestic properties (with the exception of red diesel).

This means that using a system to provide warmth to a room or building, or using a boiler or other appliance to heat water or other substances for use in or on the premises is entitled to use fully rebated kerosene and Industrial Heating Oil (IHO) on any premises.

Financial support scheme launched for heating oil users

To support off-grid businesses with their heating costs, a non-domestic alternative fuel payment portal has been launched, enabling eligible applicants to apply for the support payments.

Commercial and non-domestic properties that have consumed over 10,000 litres of heating oil in a recent 12 month period are now entitled to top up payments which will be tiered according to usage up to £5,800.

Support is also extended for higher volume users of heating oil that consume over 150,000 litres a year with bespoke arrangements available.

Non-domestic properties covered by the scheme include:

  • farms, warehouses, pubs and hotels run by businesses or individuals
  • those run by voluntary sector organisations, such as charities
  • places of worship and community halls
  • public buildings, such as schools, hospitals and prisons

Are there any cases where users are not covered under the scheme?

Whilst fuel used for space heating and industrial processes is covered by the scheme, organisations that use the fuel for the following purposes are not eligible:

  • generating electricity which is then returned to the grid
  • transportation
  • selling to end-users in another location

You should also be aware that red diesel (gas oil) is not covered under this scheme.

How can I apply for the IHO and Kerosene Financial Support Scheme?

If you’re a business with a non-domestic property that’s connected to the grid, you will receive an automatic £150 payment through your energy supplier.

Off-grid businesses will not automatically receive the financial support and can apply for a fixed alternative fuel payment or £150 through the portal.

You can apply for the fixed £150 payment if:

  • the property is not connected to the gas grid
  • the property is not connected to the electricity grid
  • you purchased alternative fuels for use at the property between September 2022 and January 2023 (Alternative fuels include liquid petroleum gas (LPG), solid fuel, wood or kerosene).

To apply for the top-up payment, you must provide:

  • proof of address
  • company registration details
  • proof of purchase (receipts over a 12-month period, starting 1st September 2021 for the top-up or for the £150 fixed payment, one invoice that proves your purchase of alternative fuels for use at the property dated between September 2022 to January 2023)
  • bank account details

Businesses are urged to apply now as the portal closes on Friday 28th April.

Apply here

Are you still unsure about how the new changes affect you? Call our fuel experts today on 0330 123 1144 to find out more.

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