FCI seeks Agricultural Diesel Debate Scheme to offset massive fuel cost increases for Marked Diesel Oil for Farm & Forestry Contractors
The Association of Farm Contractors in Ireland (FCI), the national association representing Agricultural/Farm & Forestry Contractors in Ireland, is concerned about any proposal to increase the Carbon Tax on Agricultural Marked Diesel Oil in Budget 2019. FCI has written to the Minister for Finance and Public Expenditure, Mr. Paschal Donohoe, T.D., requesting that if the Carbon Tax rate is to be in Budget 2019 then Agricultural/Farm & Forestry Contractors should be allowed to qualify for an Agricultural/Farm & Forestry Contractor Marked Gas Diesel Oil Rebate Scheme.
“Irish Farm & Forestry Contractors are major consumers of Agricultural Marked Gas Diesel Oil, consuming in excess of 100 million litres, annually. Oil prices have increased by almost 40% this year compared with 2017 and any further increase in Carbon Tax will push this to nearer to a 50% increase. This is at a time when farming and the role of the Agricultural/Farm & Forestry Contractor continues to be under threat from significant cost increases and poor cash-flow as a result of a disastrous year for farm incomes, driven by unprecedented weather events,” said Richard White. “These events and the threat of Carbon Tax induced further cost increases, are equally as critical to the competitiveness of the agricultural sector, as they were to the road haulage sector when the Road Haulage Fuel Rebate Scheme was introduced in 2013,” he added.
The Current Situation
Agricultural tractors and harvesters have only one power source, a diesel engine, which is fuelled by Agricultural Marked Gas Diesel Oil. Diesel power combines engine power, high levels of torque to carry out mechanical work functions as well as delivering good economy in agricultural machinery. Diesel fuelled engines are the sole engine types used to power agricultural tractors and machinery across the world. The development of alternative power sources, natural gas, hydrogen etc, is at a very early stage. They are not expected to be offered as a practical energy alternative to diesel engines for agricultural machinery in the immediate future.
The Carbon Tax rate is currently €20 per tonne. Increasing the price of carbon by €5 would add about 3-4 cent/litre to the price of agricultural Marked Gas Diesel Oil. Agricultural Marked Gas Diesel Oil costs have already increased by more than 36% in 2018, compared with 2017. With the fodder crisis in the sector this increase has been absorbed by many Agricultural/Farm Contractors
Agricultural/Farm & Forestry Contractor Marked Gas Diesel Oil Rebate Scheme
Section 99A of the Finance Act 1999 (inserted by section 51 of the Finance Act 2013). provides for the repayment to qualifying road transport operators of part of the mineral oil tax paid on the auto-diesel purchased by them for use in the course of business. This section was supported by Revenue Commissioners’ Regulations (amendment of the Mineral Oil Tax Regulations 2012 (S.I. No. 231 of 2012)) to provide for the detailed requirements for the administration of the repayment scheme.
“The process to provide for the administration of a fuel rebate scheme is already in place,” said FCI National Chairman, Richard White. “FCI is seeking that with any further increase in Carbon Tax, that the Revenue Commissioners offer Agricultural/Farm & Forestry Contractors an Agricultural/Farm & Forestry Contractor Diesel Rebate Scheme.
With this FCI proposal, the Revenue Commissioners can repay some of the Marked Gas Diesel Oil Carbon Tax paid by a qualifying Agricultural/Farm & Forestry Contractor when the Marked Gas Diesel Oil is:
• purchased by your business within the state
• used in the course of your business agricultural contractor activities
Agricultural/Farm Contractors should be allowed to make a claim for the Marked-Gas Diesel Oil purchased during a three month repayment period, from the first day of:
Agricultural/Farm Contractors must submit your claim on the Revenue Online Service (ROS) within four months of the end of relevant quarterly claim periods.
To qualify for a Marked Gas Diesel Oil Rebate Scheme
FCI is proposing that to qualify for inclusion in this Marked Gas Diesel Oil Rebate Scheme (MGDORS), Agricultural/Farm Contractors must be a registered and licensed member of the Association of Farm & Forestry Contractors in Ireland (FCI).
What purchases should qualify for this scheme?
An Agricultural/Farm or Forestry Contractor must purchase the Marked Gas Diesel Oil in this State (ROI), only as a bulk purchase delivered to them.
The bulk purchase of the Marked Gas Diesel Oil must be:
• an amount greater than 2000 litres
• supplied by a mineral oil trader with a current fuel trader's licence in this State
• delivered to a premises or place of the Agricultural/Farm or Forestry Contractor
The Agricultural/Farm or Forestry Contractor should be allowed to claim for all Marked Gas Diesel Oil purchased within the claim period, even though you may not fully use it all within that period. FCI is proposing that the Revenue Commissioners may request supporting evidence to verify that the Marked Gas Diesel Oil was dispensed to and used in a qualifying agricultural vehicle.
For each vehicle in your claim, the Agricultural/Farm & Forestry Contractor will need the:
• vehicle registration number/Serial Number/Make & Model
• odometer readings at the beginning and end of the repayment period
• quantity of diesel purchased, for that individual vehicle, using bulk supply
For bulk purchases, ensure you have the:
• supplier’s name, address and auto-fuel trader’s licence number
• invoice number
• date of delivery
• volume of each purchase.
Marked Gas Diesel Oil rebate rates
The quarterly diesel repayment rate is calculated using the national average purchase price. The Central Statistics Office provides this information.
The repayment rate can be calculated on a sliding scale basis:
There will be no repayment when the price, including VAT, is at or below €0.65 per litre. For the first quarter of 2019 the maximum amount repayable should be 5.0 cent per litre when the price including VAT, is €0.65 per litre or over. This rate can be set approximately ten days after the end of each claim period.
List of proposed applicable rates for Marked Gas Diesel Oil Rebate repayments
Year Quarter Period DRS Rate €
2019 1 01/01/2019 - 31/03/2019 €0.05