Orion Farming Group Fuel Update 19 November 2025

There has been a gradual rise again in the average Orion prices over the last seven days.

Deliveries: Between 2 – 10 working days, dependant on the Supplier and the area they cover, suppliers are getting busier with the colder weather & their winter domestic trade starting up.

Kerosene – Take the time to check on your tanks for any requirements, with lead times increasing it may be difficult to get “Quick” deliveries.

For electricity enquiries please contact Stuart in the office or email – stuart@ofg.org.uk for any other enquiries please visit our CONTACT page

Your Farm Fuel Q&A: 19 November 2025

A factual update on the key questions impacting your fuel costs.

Q: Why are UK Red Diesel prices still not reflecting the full benefit of crude oil prices in the mid-$60s?

A: The main reason remains the high cost of the refined product (the 'crack spread') relative to the raw material (crude oil).

Diesel Tightness: While crude is cheap, the global market for middle distillates, which includes Red Diesel, remains structurally tight. This tightness is due to:

Refinery Runs: Ongoing maintenance cycles and unplanned outages are limiting the amount of finished fuel being produced.

Winter Demand: The seasonal shift to winter heating oil (which is similar to Red Diesel) is keeping demand for distillates robust, allowing refiners to maintain high margins.

The Result: The high refining margin prevents a significant pass-through of the low crude price to your farm gate fuel cost. The market is currently pricing diesel, not crude.

Q: Is there any change in the UK government's position on fuel duty that impacts my cost?

A: For the current buying season, the direct tax component of your fuel is stable.

Red Diesel Duty Rate: The rebated duty rate on marked gas oil (Red Diesel) remains at the significantly lower rate of 10.18 pence per litre (as confirmed in policy extended to 2025/26).

Future Risk: The political stability on fuel duty is expected to continue with the current government extending the freeze and the temporary 5p cut for road fuels. However, this primarily impacts white diesel/petrol. For Red Diesel, the main tax risk would be any future policy changes to the rebate scheme, though no immediate changes are forecast.

Q: What is the primary factor that could lead to a sharp fall in Red Diesel prices now?

A: The most likely catalyst for a sharp fall would be a shift in the Winter Weather/Demand outlook.

The Trigger: A prolonged period of unseasonably mild winter weather across Europe and North America would immediately reduce demand for heating oil. This would flood the market with middle distillates, causing the currently inflated refining margins to contract sharply.

Price Alignment: If the refining margin shrinks, the price of Red Diesel will finally be forced to track the low underlying crude price more closely, offering relief to farmers. Conversely, an early, severe cold snap remains the single biggest upside risk to prices.

Fuel price outlook section provided by Investing.com and Gemini.

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Please note that any opinions expressed in this update are sources from market information / analysis and do not represent views of Orion Farming Group. Orion Farming Group accepts no responsibility for any Member decisions made on the basis of information provided in the weekly fuel update.

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