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Proposals by the Department of Transport to raise the price of diesel, bringing it in line with the price of petrol in the name of climate change, are contained in a recently published Government Tax Strategy Group paper.
The proposals, if implemented, would see the price of a litre of diesel brought into line with the price of a litre of petrol over a four- to five-year period and would see an increase in the rate of carbon tax.
Galway-Roscommon independent TD Michael Fitzmaurice claims that raising the price of diesel to match that of petrol would have a major detrimental effect on the economy. Any such proposal would see the price of diesel rise by 12c to 15c/l and would affect hundreds of thousands of people who depend on their cars and vans to travel to work, and must be resisted, according to Fitzmaurice.
Fianna Fáil spokesperson on Agriculture Charlie McConalogue TD has called on Fine Gael to confirm that it will not move to hike up the rates of duty on diesel fuel, claiming that to do so would amount to an attack on communities across the border region.
He told the Irish Farmers Journal that there has been some speculation that the Government will move to hike the rates of duty on diesel fuel in the upcoming budget. He added that it would be a mistake for a number of reasons, including impacting on valuable cross-border trade and encouraging the illicit fuel industry.
The Tax Strategy Group paper also suggested raising the rate of carbon tax by either €5 or €10 per tonne of CO2 emitted to give an additional annual tax yield of up to €218m. This would further increase the cost of agricultural diesel.
The Revenue Commissioners have reported that sales of agricultural diesel (marked gas oil) declined a little in recent years and are now stable. They believe that this is due in part to Revenue’s successes in tackling the laundering of agricultural diesel and the use of a new Accutrace S10™ marker in the diesel.
The Revenue Commissioners believe that the selling of laundered fuel in the market is negligible and close to being fully eliminated. They have warned that any increase in the excise rate applied to diesel will increase the differential with agricultural diesel and increase the incentive for fuel fraud.
According to the IFA’s latest quarterly fuel survey, agricultural diesel now costs on average 60.50c/l, car diesel 112.87c/l, and kerosene 55.8c/l. Farmers in Longford, Wexford, Wicklow, Limerick, Waterford and Leitrim are paying above the national average for agricultural diesel.
On car diesel, Limerick has the lowest price at 109c/l, while it is above 120c/l in Leitrim.
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