The Ukraine crisis and matters arising from it continue to adversely affect European and Global oil markets, causing a sustained increase in the price of crude and in the price of refined products on the retail market.
The Government recognises the important role the haulage sector plays in supporting the economy and is fully aware of cost pressures on haulage businesses arising from high fuel prices, in particular since the outbreak of the conflict in Ukraine.
I can confirm that my Department will operate a new €18 million support scheme for licensed hauliers in early 2023. The scheme will cover eligible heavy goods vehicle authorised on the licence of a current road haulage operator as of 15 December 2022, subject to the operator satisfying the terms and conditions of the scheme at the time of application.
The full details of how the support scheme will operate will be finalised and communicated directly to road haulage operators in Q1 of 2023. Final approval of the scheme is dependent on a number of factors, including State Aid approval from the European Commission.
Further, since March 2022, the Government has put in place several measures to help ease cost pressures on haulage businesses:
- On 10 March 2022, to alleviate the impact of rising fuel prices, the Government introduced VAT inclusive excise duty reductions of 15 cent per litre of diesel and 20 cent per litre on petrol. A further reduction of 1 cent per litre (VAT inclusive) applied from 1 April 2022 to offset the impact of anticipated increased prices as a result of the increase in the Biofuel Obligation Scheme administered by Minister for Transport and Environment, Climate and Communications. These reductions were due to expire on 12 October 2022 but in recognition of continuing elevated costs these measures were extended out in Budget 2023 to 28 February 2023.
- On 15 March 2022, the Government introduced the Licensed Haulage Emergency Support Scheme. The Scheme was administered by the Department of Transport and provided a temporary financial support of €100 per week, for eight weeks, for each eligible heavy goods vehicle authorised on the licence of a road haulage operator as of 11 March 2022. There was good uptake of the scheme, with over €15.6 million paid out to c. 3,080 operators (approx. 80% of licensed haulage operators.).
- As part of Budget 2023, and in further recognition of the rising cost of fuel, the Government announced a reduction of the National Oil Reserves Agency (NORA) Levy to €0.001. The reduction of the NORA levy, which had been collected at a rate of 2 cent per litre, will help offset the carbon tax increase of just over 2 cent which took effect on 12 October, meaning that the price of fuel will not go up as a result of taxes or levies.
In addition to above measures, the Diesel Rebate Scheme (‘DRS’), which is administered by Revenue, has been in place since 2013 and remains available to licensed road transport operators in respect of vehicles over 7.5 tonnes. At diesel prices over €1.43 (including VAT), the maximum rebate of 7.5 cent per litre is provided. It has always been the case that some operators do not avail of this support – I would encourage all those eligible to do so.
However, it should be noted that the causes of the current fuel price pressures are not within the control of Government and are being directly influenced by external factors, including the Ukraine crisis. Unfortunately, it is not possible to fully insulate citizens and businesses from the impact of these fuel price increases.
With the benefit of the Excise reduction, the 8 weeks support under the Licensed Haulage Emergency Support Scheme and the ongoing Diesel Rebate relief and NORA levy reduction, haulage businesses have had the opportunity to revise and renegotiate contracts with their clients in order to reflect increased prices, as is an unfortunate reality in all sectors across the economy.
In this context, it is important that all businesses, large and small, across the economy share the pain of these cost increases and where it is possible review contractual arrangements to provide for such sharing in these difficult times. I would encourage all businesses to adopt a fair and reasonable approach. I understand that smaller businesses, in particular, have had some difficulties in this space.
Finally, I wish to bring to your attention that on 15 December 2022, the Government published Ireland’s Road Haulage Strategy 2022–2031. The Strategy identifies 39 actions. These actions are split into ‘Short-term priorities’ which are expected to be completed in a 2-3 year timeframe and ‘Enablers for Medium- to Long-term progress’ which will ensure the delivery of policy objectives over the full term of this strategy. Implementation of the short-term actions contained in the Strategy has begun and their progress will be monitored by a new Road Freight Forum, which will consist of relevant stakeholders from Government and the haulage and road freight sector.
