9.5.22 Rail Operating Costs

Information on rail operating costs can be obtained through discussion with Transport Scotland.

Where a significant change in the level of service operated is expected, practitioners should include an assessment of the impact on this change on Exchequer revenues. Change in fuel duty should be calculated using the following formula:

Change in fuel duty received = (K_t * C_t * τ_t)(1 + t)

Where:

K_t = Change in diesel train kilometres/train vehicle kilometres;

C_t = Average rail fuel consumption rate (litres per train/vehicle km);

τ_t = Rail fuel duty (£ per litre); and

1 + t = Indirect tax correction factor, see Section 9.5.6.

Research into rail fuel consumption rates is currently ongoing. In the interim, practitioners should refer to the Strategic Rail Authority's Rail Emissions Model (2001). The rate of rail fuel duty is published by HM Excise and Customs where rail fuel is classified as a hydrocarbon oil; the rate for ‘marked gas oil and ultra-low sulphur diesel not for road fuel use' should be applied.