Bus Service Operators Grant: commercial transport operators

The Bus Service Operators Grant (BSOG) is a discretionary grant paid to operators of eligible local bus services to help them recover some of their fuel costs.

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The Bus Service Operators Grant (BSOG) is a discretionary grant paid to operators of eligible local bus services to help them recover some of their fuel costs. The amount each bus operator receives is based on the amount of fuel they use.BSOG aims to benefit passengers by:

  • helping operators keep fares down

  • enabling operators to run services that might otherwise be unprofitable and be cancelled

Bus operators in receipt of the grant must keep accurate records of the eligible kilometres run and the fuel consumed in operation of local bus services so as to satisfy officers of the Department for Transport (DfT) that the figures on the claim are correctly stated.It should be noted that while DfT’s intentions are to avoid placing unnecessary administrative burdens on bus operators, officers of DfT or Driver and Vehicle Standards Agency (DVSA) will periodically visit bus operators to check that claims comply with the appropriate legislation and to ensure that accurate records are being kept in support of claims.


Smartcard and automatic vehicle location (AVL) incentives

Operators may receive an 8% increase in their BSOG rate for vehicles that have operational smartcard systems installed and a further 2% increase for vehicles that are fitted with AVL equipment.

Low carbon emission bus (LCEB) incentive

Operators of vehicles that hold a low carbon emission certificate may be eligible for an additional 6p per kilometre for those vehicles. A low carbon emission vehicle must have 22 or more seats and be able to achieve a 30% reduction in its greenhouse gas emissions compared to an average Euro 3 diesel bus of the same passenger capacity.

Zero emission bus (ZEB) incentive

Operators of vehicles that hold a zero emission bus certificate may be eligible for a 22p per kilometre rate of BSOG for those vehicles. Eligible buses must:

  • meet the normal BSOG rules

  • demonstrate zero tailpipe emissions

  • have no internal combustion engine (for example, electric and hydrogen buses)

This will need to be verified by certification, which builds on the existing testing and certification process for the LCEB incentive. Vehicles for which operators receive the ZEB incentive are not eligible for any other incentives.

Claims from 1 April 2023

Operators that run a service under a section 19 or section 22 license and use vehicles weighing up to 3.5 tonnes are now entitled to claim a ZEB incentive on that service without requiring a ZEB certificate or summary sheet. If operators wish to claim under this exemption, they must supply a copy of the vehicle log book (V5C) demonstrating the vehicle has zero tailpipe emissions, and a self-certification that the vehicle has no other internal combustion engine on board. This can be done by email that accompanies the claim.


The following is a brief description of eligibility for commercial bus operators wishing to claim the grant for services operated in England and is for guidance only. To qualify for the grant a bus service must be registered as a local bus service, a service run under the London local service permit, or exempt from the need to have such a licence. Local services (other than schools’ services and those for elderly or disabled people) will qualify for the grant if:

  • At least half the accommodation is available and the service is regularly used by the general public, stopping places are situated where the public is likely to use them and all the fixed stopping places (whether marked or otherwise generally recognised) are located where they are likely to be used with reasonable frequency.

  • In any section of the area of operation of the service where there are no fixed stopping places, the arrangements for determining when and where passengers may be taken up and set down are such that members of the general public may take advantage of them with reasonable frequency.

  • The public can make a single journey between any 2 stopping places at a fare that is not designed to deter them from using the service (for example, a long distance service on which very high fares are charged for short journeys could be ineligible for the grant).

  • In the case of a flexible service, the advance booking arrangements are such that they do not act as a deterrent to members of the general public wishing to make a single journey that is otherwise provided for in the particulars of registration.

  • The arrangements for paying the fare are not a deterrent to using the service.

  • There are no signs or descriptions giving the impression that only particular categories of people can travel on the vehicle.

  • Members of the public can inform themselves about the service, the places served and times of operation.

  • The service is not a tendered service.


The main exceptions to these conditions are bus services provided or secured:

  • by education authorities under section 509 of the Education Act 1996

  • for persons who are over 60 years old or disabled

These services must meet the Conditions of eligibility, except that:

  • they will qualify provided that some seats are available to the general public and the service is regularly used by the public

  • the stopping places to or from which the service is mainly provided (for example, a school) need not be used by the public

  • condition E will not apply (full conditions of eligibility are available in the BSOG claim form)

Other exceptions:

  • excursions and tours will not qualify for Bus Service Operators Grant (‘excursion’ or tour’ means a service on which all the passengers travel together on a return journey)

  • services using vehicles designed to carry 8 people or less will qualify only if they satisfy all the conditions A to F (details available in the BSOG claim form) and if the service is operated to a timetable

  • services that are intended to operate for less than 6 consecutive weeks and are not emergency services will not qualify

  • services substituting a bus for a rail service that has been temporarily discontinued will not qualify

  • services whose primary function is to transport travellers between rail stations, airports or sea terminals and their dedicated car parks will not qualify

  • services operated in conjunction with an employer (for example, a factory) to take employees to and from the workplace will not qualify for BSOG

  • services that are exclusively for the use of pupils, students or employees of a school or college (not open to the general public)


DfT no longer pays BSOG for the following categories of services:

  • services operated under franchise to Transport for London

  • community transport (s19) services operated in-house by English local authorities

  • various specialist services

  • services supported under tender by English local authorities, except incentives for smartcard, automatic vehicle location, low carbon emission vehicles and/or zero emission vehicles

  • commercial services operated within the Transport for Greater Manchester boundary, except incentives for smartcard, automatic vehicle location, carbon emission vehicles and/or zero emission vehicles


BSOG aims to benefit passengers by helping operators to:

  • Reduce fares by keeping running costs down; 

  • Run services that might otherwise be unviable and be cancelled


How to apply

The Bus Service Operators Grant (BSOG) is a discretionary grant paid to eligible transport operators to help them recover some of their fuel costs.Operators who believe they are eligible should complete and return the application form Bus Service Operators Grant - application form for commercial transport operators (publishing.service.gov.uk) with any relevant supporting documentation to bsog@dft.gov.uk.

Supporting information

BSOG Rates

Fuel type - Unit payable - BSOG rate from 1 January 2014

Diesel -Pence per litre - 34.57

Biodiesel - Pence per litre - 34.57

Bioethanol - Pence per litre -34.57

Biofuels (used cooking oil) - Pence per litre - 34.57

Unleaded petrol - Pence per litre -32.66

Natural gas used as road fuel -Pence per kilogram -18.88

Road fuel gas other than natural gas - Pence per kilogram -18.88