John O'Mahony (Mayo, Fine Gael)
Link to this: Individually | In context

I thank the Ceann Comhairle for selecting this matter. I also thank the Minister for Communications, Energy and Natural Resources for being present in the Chamber to hear what I have to say.

Everyone is aware of the fact that fuel prices have been spiralling upwards. This matter affects every citizen, business and industry, especially the haulage industry, in the State. I am aware that there are no easy solutions in respect of the problem of rising fuel prices, especially as Ireland is powerless to influence international oil prices. I am not, therefore, raising this matter from the point of view of having a go at someone. I am, however, convinced that we have passed the point of diminishing returns as far as rising fuel prices are concerned. This was confirmed yesterday by the Irish Petrol Retail Association which indicated that there has been a decrease of up to 10% in fuel sales. This is because people are reducing their level of travel, which might be no bad thing in one sense. We need, however, to stimulate businesses, including those of taxi drivers and hauliers, industry and our transport services.

It should be noted that when fuel prices increase, the Exchequer takes an increased percentage. A system was implemented in the UK under which, as prices increase, the percentage taken by Her Majesty's Revenue and Customs is adjusted in order that Treasury would take in the same rather than a larger amount.

I accept that resources are scarce. In that context, I wish to raise another issue that has been brought to my attention by a number of legitimate oil distributors in recent weeks. The latter have indicated to me that there has been a massive increase in the laundering of marked gas oil from the North which has found its way across the Border. This issue has not been brought to the attention of many people but I have contacted various Ministers and the Revenue Commissioners in respect of it. On 1 January last the specification used for off-road transportation was changed from 1,000 parts per million, ppm, of sulphur to 10 ppm. In effect, this means that it is more difficult to detect diesel which has been washed. As a result, this fuel can get through the system.

Once the dye marker is removed, the relevant test will not show a fuel to be a marked product which is supposed to be sold with a duty rebate. The type of product to which I refer is being sold through service stations that are leased on a short-term basis by the distributors who are purchasing it. The duty difference is 37.84 cent per litre and this gives rise to a loss of €14,380 in excise duties on a standard truckload of fuel. Most of this trade is conducted by subversive elements which are located in the Border area and which have a great deal of experience in chemistry.

A simple and quick solution in respect of the matter to which I refer would be to require all oil distributors to leave marked gas oil with the dye intact and to require a separate registration for each distributor to claim back the rebate of duty. Those who register would be obliged to meet certain criteria, such as the provision of tax clearance certificates, submission to inspections and the provision of information relating to gas oil sales. Duty could be refunded weekly. If the approach to which I refer were adopted, the problem that exists could be wiped out overnight.

A solution such as that which I propose would not cause any reduction in revenue to the State. It would, however, ease the burden on hard-pressed motorists, businesses and hauliers. A jobs initiative is due to be announced in the House next week and we want to make it less costly for businesses to operate. I am trying to be constructive with regard to that matter and, as a result, I suggest that there is a ready-made solution available in the context of adjusting fuel prices in so far as is possible, ensuring that all distributors are operating legitimately and obtaining the revenue that is due to the State. I look forward with interest to the Minister's reply in respect of this matter.

Pat Rabbitte (Dublin South West, Labour)
Link to this: Individually | In context

I thank Deputy O'Mahony for raising this important issue which is of considerable concern to me and my Government colleagues. I did not anticipate the aspect of criminality to which the Deputy referred. I am aware that the type of behaviour outlined is occurring and that the customs division of the Revenue is focused on dealing with it. This is a matter of some significance which must be addressed and in respect of which vigilance is required, particularly in the context of the reported scale of the problem. I understand an incident relating to this aspect of the matter is currently in the news.

On the wider issue raised by Deputy O'Mahony, it must be acknowledged that Ireland is critically dependent on imported fossil fuels, especially oil and natural gas. Global fuel prices have been trending upwards in recent months and Ireland, along with other countries, is a price taker in international commodity markets. While active competition in retail energy markets will keep increases to a minimum, the reality is that increasing global fuel prices ultimately result in higher costs for Irish consumers, whether at the petrol pump or in electricity and gas bills. I am keenly aware of the impact this has on consumers and I am, therefore, strongly focused on implementing the programme for Government actions aimed at reducing the impact of imported fossil fuel prices on householders and businesses.

The programme for Government sets out a range of commitments on energy efficiency and renewable energy programmes which are aimed at moving the economy away from reliance on imported carbon intensive fossil fuels, in respect of which there continues to be significant price volatility. These ambitious measures will support energy affordability, enhance Ireland's competitiveness and develop new jobs and industries. I am of the view that Ireland has the opportunity to become a global leader in the commercialisation of next generation bioenergy technologies, as well as a manufacturing hub for renewable and low-carbon technologies.

The new retrofit programme will also support employment by seeking to increase significantly the pace of uptake in respect of energy efficiency measures and by changing radically the way householders are incentivised and supported. One of the most commonly identified barriers to retrofitting is that the initial cost appears prohibitive. Under the new proposals, energy efficiency measures will be more accessible by the provision of discounts up front rather than obliging people to wait for retrospective grant payments. The new programme will entail the existing warmer homes scheme, the home energy saving scheme and the greener homes scheme being incorporated into the programme during the course of the year.

The warmer homes scheme is systematically addressing poor thermal efficiency performance of low income, privately owned housing. It provides energy improvements at no cost to eligible households and brings benefits to recipients in the context of energy affordability, tangible health improvements and overall well-being. The scheme is complemented by a similar retrofit programme which is delivered by local authorities on behalf of the Department of the Environment, Community and Local Government. In addition, the fuel allowance provides many families with essential financial assistance in respect of the purchase of fuel. More than 370,000 households received the fuel allowance in 2010.

Grant aid to move to renewable heating is also being provided under the greener homes programme. This is allowing householders, businesses and local enterprises to move away from oil fired heating towards more efficient and sustainable forms of heating such as those produced from solar, geothermal and biomass sources.

In the transport sector, to which the Deputy referred, we are supporting a move away from imported oil through the successful introduction of bio-fuels into the fuel chain as well as an electric vehicle programme. I launched the electric vehicle grant scheme, which will sustain and expand Ireland's leadership position with regard to this new and rapidly developing technology, earlier in the year. Electric vehicles offer huge potential for Ireland not just because of their energy efficiency, but also because of the ability they provide to use cheap grid sourced electricity, an increasing amount of which will be sourced from renewable resources over the coming years.

This will have obvious benefits in reducing our dependence on imported fossil fuels in the medium term, but our early and considerable involvement in the electric vehicle sector will also provide enterprise opportunities for Irish companies. On foot of trial and pilot programmes, a number of Irish companies have already built charging systems and are involved in software design of the infrastructure.

The bio-fuel obligation scheme incentivises and enables the sustainable growth of the Irish bio-fuels market and supports indigenous bio-fuel producers, allowing for the displacement of traditional oil products in the transport sector. In total, during the first obligation period, the obligation scheme was responsible for bringing a total volume of 98.5 million litres of bio-fuel into the motor fuel market in Ireland. This equates to more than 4.25% of the transport fuel market in the State, up from practically zero in 2005. The range and breadth of the actions set out in the programme for Government demonstrate the Government's commitment to reducing the impact of high fossil fuel prices, enhancing security of supply and ensuring competitiveness.