Dáil debates

Thursday, 24 March 2022

Saincheisteanna Tráthúla - Topical Issue Debate

Fuel Prices

2:35 pm

Photo of James O'ConnorJames O'Connor (Cork East, Fianna Fail)
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I thank the Minister of State. I want to raise the important issue of the fuel concerns affecting all sectors in the road transport sector in Ireland, in particular smaller private bus operators. There is not a community in Ireland that is not serviced by the work undertaken by many coach hire companies. The work they do to promote tourism is very much appreciated throughout rural Ireland, as is the work they do with sporting clubs and other organisations in our communities that heavily rely on the private bus sector.

It is important to mention that millions of road journeys are provided annually in Ireland because of the coach hire business in terms of school runs. We have to acknowledge that the sector has a significant role to play in reducing traffic on our roads and encouraging people to transition to public transport. The sector is under particular pressure at the moment when it comes to increasing fuel costs.

As the Minister of State might be aware, 90% of school transport routes in the country are provided by private bus operators on behalf of Bus Éireann. However, the Coach Tourism and Transport Council of Ireland, CTTC, recently conducted a survey which showed that 95% of school transport providers cannot guarantee provision of transport for students up to June without some degree of subvention. I wanted to mention this, which was brought to my attention by the representative body for coach tourism and operators around the country, for the information of the House. That gives us an indication of how serious this particular issue is.

Progress was recently made, which was very welcome and was brought about by the hard work of the Road Haulage Association. I want to compliment its president, Eugene Drennan, and the officials working in that organisation for the efforts they have secured from Government and I want to thank the Government for coming to the table in that regard.

However, we need to do more for coach and bus operators around the country. more than 11,000 people are directly employed in the sector and it contributes over €600 million to our economy on an annual basis. When it comes to tourism and school transport, it is absolutely essential. The Government has to do more. I sincerely hope that in the absence of the Minister for Transport, Deputy Eamon Ryan, departmental officials are listening to my contribution. I will raise this issue directly with him on his return and I ask the Minister of State to bring my contribution to his attention.

I would appreciate if the Department can take into account just how hard fuel prices are hitting smaller operators, that is, those who have fewer than 20 vehicles in their fleet. No matter what parish we go to in the country, we will always find at least one, if not many, coach companies. The Government should identify this as an issue and work specifically with the sector.

I welcome the fact that meetings with the CTTC and the Government will take place in the coming days. Overall, we must provide additional supports similar to those currently in place for the haulage sector, such as a direct subvention on a temporary basis. We need to recognise that we are now in a war situation internationally and we need to make sure that we look after this sector which, quite frankly, was thriving before the pandemic. Unfortunately, the industry was hit by the pandemic and is now being hit by high fuel prices.

The price of a barrel of oil has stabilised but unfortunately it is still high. Supply is outstripping demand, but it is only a matter of time before we return to the situation that pertained three or four weeks ago. That is highly concerning. The Government needs to act urgently.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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I thank Deputy O'Connor for raising this matter and thank the Minister of State, Deputy Ossian Smyth, for being here to deal with it.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I thank Deputy O'Connor for asking about the supports available for private bus and coach operators during this wartime period which has led to elevated fuel prices. I am answering this question on behalf of my colleague, the Minister, Deputy Ryan.

I understand the Deputy's question relates specifically to the possible provision of fuel supports to the bus and coach sector similar to those recently introduced for hauliers. As the House is aware, a whole-of-government approach is being adopted in regard to the Ukrainian crisis. I am pleased to advise that a high-level group has been established in the Department of Transport to monitor and respond, as appropriate, to the crisis and its impact on the transport sector. This group is informed by other Departments, agencies and transport stakeholders and seek to ensure a co-ordinated response to the evolving situation.

As part of this process, contingency plans in the Department and across all agencies are being reviewed and refreshed, where necessary, in response to the potential impacts on the transport sector, including those related to fuel costs. As Deputies will be aware, on 9 March the Minister for Finance announced a temporary reduction in the excise duties charged on petrol, diesel and marked gas oil. Excise duty on petrol was reduced by 20 cent per litre and by 15 cent per litre of diesel, with these reductions to remain in place until 31 August 2022. This measure was introduced to help ease the burden on all citizens and businesses across the economy.

Subsequently, on 15 March the Government approved an emergency support measure for licensed hauliers in order to address the cost pressures arising from current high fuel prices. The support is targeted.

A temporary grant scheme will provide a payment of €100 per week for each heavy goods vehicle over 3.5 tonnes as listed on a road haulage operator's licence. The scheme will operate for a period of eight weeks and will be reviewed thereafter. The estimated cost to the State of the temporary response to these extraordinary circumstances is €18 million.

In responding to the Deputy's question, I wish to be clear that licensed bus and coach operators are an integral part of the overall public transport system, particularly in areas that are not covered by existing public service bus and rail services. In recognition of the important role of these operators throughout the Covid-19 pandemic, the Government has provided temporary financial supports for certain licensed commercial services with a view to protecting capacity across the public transport sector throughout the crisis. This temporary support was initially introduced for a period of six months in June 2020. However, owing to the continued impact of Covid-19 on passenger numbers and the associated drop in fare revenue, the supports have been extended on several occasions and more than €60 million has been provided to the sector to date under these schemes. In acknowledgement of the continuing difficulties facing the sector, I am pleased to inform the Deputy that the Minister, Deputy Ryan, recently approved an extension of the supports for a further three months, until 30 June 2022.

As the Deputy is aware, fuel costs have increased substantially since the commencement of the scheme in June 2020. I can confirm that the NTA has funded the operators for actual fuel costs throughout this period and will continue to do so throughout the extension of the scheme. Moreover, to ensure the continued operation of public transport service in rural areas, the NTA recently provided an additional level of subvention to support Local Link operators in the delivery of these services. These supports are provided to operators who are on fixed-rate contracts and therefore receiving no further increases to their based contracted rates. The funding has currently been provided to cover the costs for the first quarter of 2022 and this is a once-off payment initially. The situation will be monitored on an ongoing basis.

2:45 pm

Photo of James O'ConnorJames O'Connor (Cork East, Fianna Fail)
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I thank the Minister of State for his reply. I appreciate the information that has been brought to light and that the Minister, Deputy Ryan, is aware of it. That is welcome. It is good to hear about the extensions. However, putting it in an overall picture, we must remember that more than 41 million passengers are taken to school by coach operators. That is a staggering statistics that indicates the scale of the service provided to people across the country. Two thirds of operators have experienced fuel cost increases of more than 60% in the past 12 months. That is very concerning and enormously costly. We need to mind the gap in this regard.

A particular issue raised at the committee - unfortunately, there was little time to discuss it because of the time constraints and the number of people who were present - is the lack of alignment in State contracts and Government procurement. The committee was told by the CCTC that the lack of alignment is troubling. It is seeking to have a legally enforceable fuel variation clause introduced in school transport contracts so that operators have protection against extreme variation in fuel costs. That struck me as a sensible suggestion that we could consider, particularly from the point of view of the Department of Transport. It would be welcome if a degree of security could be provided in that area. If that is something the Minister of State can bring back to the Minister, I would appreciate it.

I am very concerned about the national oil reserve. As all present are aware, under international law the State is obligated to have a supply of 90 days for the country in the event a supply crisis was to emerge. Considering how close we came to such a crisis a number of weeks ago in the context of the security situation in Russia and Ukraine, which looks like it will deteriorate, we need to be on standby as a Government because the damage that would be done to all sectors of the economy, including the sector to which I refer, if there is a supply crisis is enormous. This is an island nation and we need to be on standby to secure and access that reserve, much of which is kept off the island of Ireland. As an island, we need to make sure we have the security in place to access that reserve if necessary.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I thank the Deputy. The first item I will address relates to procurement and State contracts. I refer to situations where a person entered a contract with the State to provide a service but the cost to the person of diesel has greatly increased. This is a specific case of a problem in procurement where inflation has made the economic reality of the contract difficult for the contractor to fulfil. An information note was produced by the Office of Government Procurement, OGP, which reports to me through the chief procurement officer, to address inflation questions, particularly in the context of the construction sector, but not on fuel. I will discuss that with the OGP and I am willing to revert to the Deputy specifically on that question.

On the issue of the National Oil Reserve Agency, NORA, I agree the value of the agency is clear to see. This is not just an Irish system; it is across the EU so that the whole of the EU has a 90-day buffer. It is incredibly important that we have it. If the Deputy has further questions on it, I will be happy to engage with him in that regard.

The Department of Transport and the National Transport Authority, NTA, regularly engage with operators on the evolving situation and the impact the Ukrainian crisis is having on operators' ability to provide public transport services. I reassure the House that CIÉ operators hedge the vast majority of their fuel in advance and, as such, are largely sheltered from the current rising fuel costs. As I outlined earlier, the commercial bus operator, CBO, supports have now been extended to the end of June 2022 and additional levels of subvention have been provided to support Local Link operators with managing the rising costs of diesel and in order to ensure the continuation of these essential services.

In addition, the Department of Transport participates in the EU contact network, which comprises all member states and representatives of the European Commission. This network, established in response to Covid-19, is now solely focused on the Ukrainian conflict. At its meetings, the network receives reports on transport-related impacts at the EU-Ukraine border, including the impact on supply chains. As the House is aware, more than 10,000 refugees from Ukraine have arrived in Ireland to date. A cross-departmental team is looking at all issues arising in the context of Ireland's response to the humanitarian crisis as residents of Ukraine seek refuge away from the war zone, including the consideration of any further measures that may be needed to assist people fleeing the conflict. In this context, the NTA recently decided to allow free travel for newly arriving Ukrainian refugees on any public service obligation public transport service from point of entry to their end destination.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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The second important item that has been selected was tabled by Deputy Pringle, who wishes to discuss the decision of the United Kingdom to impose an electronic travel authorisation scheme in the context of the common travel area.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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I thank the Ceann Comhairle for selecting this Topical Issue matter.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I am not prepared to answer the question on the common travel area. We may have to wait for another Minister, unless we can go to another question.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputy Ó Broin is present. His question relates to implementation of the recommendation of the interim report on mortality among the single homeless population.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I can reply on that issue if the Ceann Comhairle so wishes. My apologies.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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Deputy Pringle, my apologies.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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No bother. I was going to say that the Minister of State, Deputy Smyth, is not the right Minister to answer this question anyway. That has taken away a bit of my thunder.

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Ceann Comhairle; Kildare South, Ceann Comhairle)
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The Minister of State, Deputy Smyth, is very versatile.

Photo of Thomas PringleThomas Pringle (Donegal, Independent)
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It is not a matter under his Department. We will see who arrives in the meantime.