Bus Service Operators Grant

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The Bus Service Operators Grant (formerly Fuel Duty Rebate) is a scheme that refunds some of the Fuel Duty incurred by operators of registered local bus services in the United Kingdom. In 2006 the grant repaid 81% of duty paid on ultra low sulphur diesel fuel, and 100% for bioethanol, biodiesel and liquefied petroleum gas.[1]

Current rates[edit]

Rates as per 1 April 2012 (in pence per litre).[2][3]

Fuel Duty Rebate
Diesel (ppl) 57.95 34.57
Biodiesel (ppl) 57.95 34.57
Bioethanol (ppl) 57.95 34.57
Unleaded Petrol (ppl) 57.95 32.66
Natural gas used as road fuel (inc biogas) (ppkg) 26.15 18.88
Road fuel gas other than natural gas (e.g. LPG) (ppkg) 33.04 18.88


The grant is available for operators of local bus services available for use by the general public which operated on public roads. The definition of 'local' is that stops should not be more than 15 miles apart.[4]

The grant is also available to operators of vehicles with Small Bus Permits (Section 19) when providing services for some groups of passengers:-[5]

  • People aged 60 or over.
  • Persons of all ages, who are physically or mentally impaired and persons assisting them
  • People on income support
  • People on job seekers allowance
  • People of all ages, suffering a degree of social exclusion by virtue of unemployment, poverty or other economic factors, homelessness, geographical remoteness, ill health, or religious or cultural reasons.
  • People of all ages, who believe that it would be unsafe for them to use any public passenger transport services.
  • Carers or children under 16 years of age accompanying any of the above

Some longer UK coach services, such as the Oxford Tube claim the grant for part of their routes. The Oxford Tube initially made a stop at Lewknor on the M40 motorway in order to qualify for the grant between Oxford and that point. Subsequently it has created additional demand from passengers joining at Lewknor.[6]


Fuel duty rebate[edit]

The Fuel duty rebate was established under section 92 of the Finance Act 1965.[7] Further legislation was included in section 19 of the Transport Act 1985.[7] Fuel Duty Rebate (FDR) was available only on complying local bus services. Until 1994 the level of FDR was 100%[8] By 1999 the rebate had been reduced to about 67%.[9]

Bus service Operator Grant[edit]

The terms were changed by Section 154 of the Transport Act 2000.[7] Fuel duty rebate was renamed the Bus Service Operators Grant (BSOG), even though it is still as a rebate paid at a set rate per litre of fuel. In 2002 the 'Bus Service Operators Grant (England) Regulations 2002' extended the grant to cover a wider range of community transport service operators.[7]

Under the Coalition government's Comprehensive Spending Review (CSR) the grant was kept at 81% until April 2012, when reduced by 20%. The current payment rate is the lowest ever percentage since the rebate's inception in the 1960s.

In autumn 2012 the DfT held a consultation on bus subsidy reform in which it presented options to switch some or all of the rebate away from the bus operators that incur the fuel cost, and pay it instead to local authorities.[10] It opened on 13 September 2012 and closed on 12 November.


External links[edit]