The red diesel ban has been on the cards for a few years now, long before Covid (actually that delayed it by a year). There was never going to be a good time to do it, and as it transpires, this is a really bad time for many aforementioned reasons. But it wasn't exactly thrown on us suddenly and whilst I agree it has nothing to do with the environment, you have to hand it to them for coming up with a fairly easy way to effectively tax an industry that traditionally does very well profits wise.
Don't get me wrong, I'd love to have rebated fuel back, actually I'd really prefer it if the rebate was applied to HVO, GTL etc only to push us down that route, I think that would have been a good compromise.
Anyway, they wont gain much from VAT as most of us claim that back, and the fuel duty we now pay will be offset against our end of year profits - meaning we pay them less at that end. So I wonder just how much it will add to the treasury? Somebody smarter than me is going to have to work that one out!