Tax and Revenue Administration OLD Fuel Tax Act Information Circular BD-4R1

BD-4R1 / August 1998

Note: Due to the Government of Alberta reorganization in November 2004, where applicable, the web versions of our documents have been updated to change references from "Minister of Revenue" or "Provincial Treasurer" to "Minister of Finance". References to "Revenue Canada" or "Canada Customs and Revenue Agency" have been changed to "Canada Revenue Agency" to reflect that name change as well. The paper version of this document is available from Tax and Revenue Administration and if applicable, will be updated as time permits.

ALBERTA FUEL TAX ACT INFORMATION CIRCULAR - BULK DEALERS
DYEING OF FUEL

This information circular discusses requirements and procedures for the dyeing of fuel. The topics discussed include:

• Dyed Fuel
• Product Mixes
• Hand Dyeing Fuel
• Safety and Storage of Dye

Dyed Fuel

1. Fuel may only be dyed if Tax and Revenue Administration ("TRA") has provided authorization for it to be dyed. The only dye that may be used is that provided by TRA. TRA is currently supplying a purple dye, but plans to switch to a red dye, which is the new Canadian standard for all provinces, later in 1998. TRA has authorized the major oil marketing companies to dye gasoline and diesel fuel using automated injection equipment, and to provide the dyed fuel to bulk dealers. Hand dyeing of fuel by bulk dealers is permitted only when a product mix occurs.

Product Mixes

2. A product mix happens when clear fuel is put into a tank containing marked fuel, or marked fuel is put into a tank containing clear fuel. The result is a product mix. This fuel cannot be sold "as is". It must first be dyed to the proper strength and rebranded to marked fuel. Failure to follow the correct procedures could result in the bulk dealer being liable for fuel tax on fuel that is not properly rebranded.
   
   
3. Bulk dealers should keep on hand a copy of TRA's "Rebrand Notification" form (form AT376). The form is available from TRA at the address shown on the first page of this circular. The form contains instructions to allow the bulk dealer to account for all fuel involved in the mix and associated fuel tax as well as the volume of mixed fuel which must be hand dyed.
   
   
4. When a product mix of clear and marked fuel occurs the bulk dealer should turn off the valves leading to and from the affected tanks. Fuel should not be sold or removed from the tanks until it has been properly rebranded to marked fuel.
   
   
5. Bulk dealers who are independent agents should report the volume of mixed fuel that was hand dyed on their "Independent Bulk Agents Monthly Statement of Marked Fuel Sales" (form AT372) along with the Rebrand Notification. This will enable them to obtain a refund of fuel tax paid on the portion of the product mix that was clear fuel. Bulk dealers who are commission agents should send the Rebrand Notification to their oil marketing companies.

Hand Dyeing Fuel

6. TRA supplies fuel dye free of charge to bulk dealers. No dye other than that supplied by TRA may be used. Bulk dealers should ensure they have sufficient dye available in case a product mix occurs. The correct concentration of purple dye in marked fuel is 10 millilitres of dye per 1,000 litres of fuel. The correct concentration of red dye is 14 millilitres of dye per 1,000 litres of fuel. To dye the mixed fuel to these specifications using pure dye the following steps must be taken.

   a) Determine the litres to be dyed (from the Rebrand Notification);

   b) Add 10 millilitres of pure purple dye, or 14 millilitres of pure red dye, for every 1,000 litres of fuel to be dyed;

   c) When the hand dyeing has been completed, open the valves; the fuel can then be sold as marked fuel.

7. Bulk dealers may choose to prepare a premix solution instead of using pure dye. The concentration of premix used to hand dye a product mix must be such that the fuel contains no less than 10 millilitres of pure purple dye or 14 millilitres of pure red dye per 1,000 litres of fuel.
   
   
8. After the switchover is made from purple dye to red dye, bulk dealers will begin receiving red dyed fuel from their suppliers. Fuel containing the new dye can be added to the marked fuel tank containing purple dyed fuel. The result will be colour variations between red and purple during the switchover period. This is not a concern as a laboratory will still be able to certify that the fuel is marked fuel.

Safety and Storage of Dye

9. The dye is a slightly flammable petroleum product which can cause eye or skin irritation if handled improperly. Read and follow the handling instruction on the label. The dye will permanently stain anything it contacts, so gloves should be worn when handling it. The dye should be stored in a cool, secure location, and should not be allowed to freeze.