In Budget 2020, the government announced that it would remove the Construction sector’s entitlement to use red diesel from April 2022 on. This will effectively double the cost of fuel on construction projects. We are currently tendering for projects that will still be on site after April 2022.
Am I correct in saying that the Contractor will be entitled to claim any additional cost of fuel as a compensation event under Option X2, provided that the legislative amendment comes into effect after the Contract Date? (And assuming that Option X2 forms part of the contract.)
Or could the Budget 2020 statement be interpreted as having already implemented a change in the law, whereby the contractor should make allowance for the extra cost in his tender, as an experienced contractor should be aware of the impending rise of fuel costs?
Welcome to the Group
This really needs a legal response.
As you say, the change in duty was part of the Budget 2020 statement however it was not included in the corresponding Finance Act 2020.
It is contained in the Finance Bill 2021 which was published around the 11 March 2021 but is still subject to Royal Assent to become law.
The adjustment to fuel duty will be a change in law when it receives Royal Assent and that date is the one that will need relating to the contract date.