Dáil Éireann Debate, Thursday - 12 October 2023
11. Deputy Rose Conway-Walsh asked the Minister for Enterprise, Trade and Employment if he will consider using unused funding for TBESS to fund grant support for businesses that were badly affected by LPG costs; and if he will make a statement on the matter. [44322/23]
View answerAddressing the Ministers present, I first want to welcome the fact that the Government has finally re-profiled the funding from TBESS that has not been drawn down. It is too complicated and did not have enough businesses which needed it. Other such businesses which rely on liquefied petroleum gas, LPG, were completely excluded from this. Will the Ministers provide a scheme for business users of LPG given that they were not eligible fuels under TBESS, as was previously committed to? We still have the problem with LPG gas.
In the first instance, it was not previously committed to but let me explain why, please. As part of a review of the operation of the temporary business energy support scheme earlier this year, it was agreed that my Department would examine the possibility of developing an additional support scheme for businesses that use kerosene and LPG for the purposes of heating their business premises. This was in recognition of the fact that many businesses, particularly in rural areas, are not connected to the natural gas network and therefore could not avail of TBESS, as outlined by the Deputy.
In the interests of fairness, it was necessary to ensure that any new scheme would align with the parameters, at least closely, of TBESS, i.e. business energy costs would have to have increased by at least 30% for businesses to qualify. Data on the pricing trends showed that kerosene prices increased by an average of 88% following the Russian invasion of Ukraine in 2022. This justified the creation of a scheme for businesses that use this fuel. That scheme is now currently open. The price of LPG, however, only increased by 19% during the same period. It was therefore concluded that there was not sufficient justification for the development of a support scheme for LPG users because we have to get state aid approval from the European Commission in order to do that. In order to get state aid approval we have to show that there was a significant price increase. The data does not show that for LPG, I am afraid. I was more than happy to do it if the data had shown a more than 30% increase, and there was no problem with the money.
The business users support scheme for kerosene was launched on 6 September once we got state aid approval and will be open for applications until 31 October, which is this month. Eligible businesses will receive a payment to reimburse them for half of their increased costs in the period from March to December 2022. Details of how to apply are available online at bussk.ie and I encourage all eligible businesses to apply before the deadline.
If I may add to that, our understanding of the data we have got from representative bodies and so on is that there are more than 20,000 businesses which use kerosene and are potentially eligible for this scheme. Only a very small fraction of that number have applied to date. This is a very straightforward scheme to apply for and I very much encourage people to support businesses which had a kerosene bill which increased during that period to apply for that scheme. It is a generous, supportive scheme and is easy to apply for but applications need to be in before the end of this month.
I thank the Minister and let me be helpful to him because what he is saying does not tie up with what I know and, as the Minister of State, Deputy Calleary, is here, he will know this also. First, on 21 March, the Minister of State, Deputy Richmond, assured me that a grant would be put in place for LPG-reliant businesses. Last month, rural businesses went from being an afterthought to being completely forgotten and the grant scheme was quietly dropped.
The senior Minister stated in a written response to me that the average price of LPG increased by less than 20%, and he mentioned a 30% threshold for an increase. I have been shown bills, as I would imagine has the Minister of State, Deputy Calleary, as well, which show that there were increases far above the 20%. One business, as late as one hour ago, told me today that their costs went from 39 cent to 69 cent per litre in 2022. That is an almost 100% increase. That is an absolute fact and I can give the Minister the evidence to show him that. When one needs 1000 l a week, one can imagine the pressure these businesses are under. Will the Minister, therefore, review the data that was used to exclude these businesses and will he put in place a process for these businesses to show what they are actually paying and how they can access the scheme because the data does not tie up?
The Deputy is using one isolated case. My job was to look at the entirety of the market at the time and the price increase for LPG in the country. This is what I asked the Department to do and this is what it did do. It came back with the data which showed that there was an 88% increase in the cost of kerosene but only a 19% increase in the cost of LPG during the period. This was, incidentally, the period when there was the greatest increase in energy prices. I must rely on that data rather than on individual cases. I trust that the Department did a thorough job on that. It talked to the industry and got the data from across the country. That is the kind of data which we have to present to the European Commission in order to get state aid approval to be able to intervene in the market. I cannot make decisions on the basis of one business showing an energy bill which it paid. I have to make a case to the European Commission on the basis of the broader market which is what we did.
I would still ask the Minister to ask the Department to have a look at the data because sometimes things can be got wrong and I think it has been got wrong in this situation. The issue here is not just that the businesses were hit hard by the high energy costs but they were misled by the Government twice, first when TBESS was announced and then when the grant scheme was appointed. Also, businesses make the decision such as taking on debt to back that announcement.
The other thing is that manufacturing was also excluded. Companies which were relying on kerosene for manufacturing were also included but this was just for heating not for manufacturing. I ask please that someone within the Department could just have another look at this to see what can be done because it is very much impacting on businesses in rural areas. I believe the data in this instance deserves or needs further interrogation with respect to our getting to the bottom of what we want to get at here.
I appreciate the tenor of the Deputy's question but I just want to say that nobody on this side of the House misled anybody. The reason why I insisted on moving ahead with the kerosene scheme was because I wanted to help businesses across rural Ireland in counties like that of the Deputy and others. There are many hotels, restaurants and so on which are not connected to the gas network and, therefore, were not able to get support for their increased heating bills which others who were connected to the gas network were able to get through TBESS. That is why we studied the market and looked at the increase at the time and dramatically simplified the application process for the kerosene scheme.
It is much easier to apply for and there is a much shorter application process. Despite all that, only a few hundred companies are applying when we know that more than 20,000 use kerosene. Our focus for this month is to get those 20,000 businesses, or as many of them as we can, to apply for that scheme so we can get supports to them directly.
On the liquefied petroleum gas, LPG, issue, unless I can get definitive proof that the price increased by close to 30%, it is very hard for us to make the case to the European Commission that we should be making a market intervention. The data I have at the moment suggest the increase was only 19%.
There is just time for Deputy Dillon to introduce his question.
