The wording prescribed by HMR&C for this declaration is:-

"I declare that [ ]% of the fuel purchased will be used for propelling a private pleasure craft"
and the declarant will be asked to pay the full rate of duty on the declared proportion of the fuel purchased.

I think it is important to note that the law requires higher duty to be paid on the fuel used for propulsion. This is not the same as the fuel consumed by the engine. Only about 25% of the fuel can strictly be defined as producing actual propulsion, the rest is wasted as heat and noise, the generation of electricity etc. If the law required that higher duty be paid on all the fuel that was consumed by the engine then that is what it would say. It is not our duty to interpret what our rulers may or may not have had in mind, but only to obey the exact letter of the law.