Farmers and hauliers offer different solutions to agri diesel regulation

FARMERS and road haulage firms are making opposing calls to Government on how to regulate the agricultural diesel market.

The Irish Road Haulage Association has joined with Retail Ireland and other industry groups to ask the Government to equalise fuel duty on agri diesel via a rebate scheme for legitimate users.

The association’s president, Eoin Gavin, said the exchequer is losing hundreds of millions of euro annually due to agri-diesel dyeing costs, tax-evasive laundered fuel and Irish hauliers filling their tanks in France, Belgium and other EU countries where rebate systems are in place for legitimate diesel users.

Mr Gavin said: “I have registered my company in Belgium, and they give me the rebate deduction. Every time I fill my truck, it takes 1,400L of fuel and the Irish taxpayer loses €600.

“The laundered fuel is also becoming a huge issue. Why not use some sort of rebate model? Farmers may be resisting this in public, but privately they do not want to be responsible for the loss of millions of euro to the Irish economy and the loss of thousands of haulage jobs.

“It is estimated that in excess of 2,000 heavy goods vehicles leave Ireland every week delivering exported freight. They refuel with diesel while they are on the continent due to the favourable cost of fuel outside of Ireland which has a value of approximately €270m of which nearly €50m of this would be tax.”

However, IFA farm business chairman James Kane said that the IFA’s membership is strongly opposed to any attempt to equalise the excise rates for agricultural diesel.

He said that the Government had made pre-election pledges in regards to the diesel market, and said he hoped that these commitments would continue to be honoured. He said it makes no sense to target the excise rate that applies to agricultural diesel.

Mr Kane said: “IFA has serious concerns about any attempt to raise the price of agricultural diesel for farmers and agricultural contractors.

“It would have a negative impact on cash flow, putting pressure on the viability of small businesses, particularly given the restricted access to working capital from the banks. It would impose significant additional paperwork and compliance costs on farmers.

“The big problem is the laundering of diesel. While proposals that could potentially curb the illegal laundering of diesel must be considered, this particular proposal takes no account of the likely difficulties, and costs of policing and administering a rebate system. Minister for Finance Michael Noonan has endorsed this view, and has said he is opposed to any change in the current system.

“Those who favour the rebate are saying that the agricultural contractors are backing their stance, but I have been contacted by several contractors who say they’re against the rebate.”

Meanwhile, the Professional Agricultural Contractors have voiced their support for an immediate clean-up of black market fuel. They would also like to see how a rebate system for white diesel would operate.