Thursday, April 26, 2012

Road Haulage Groups Say Fuel Issues 'Will Not Disappear'

Irish and UK Associations Take Different Lines of Attack
Shipping News Feature

UK – IRELAND – The Road Haulage Associations of both countries yesterday commented on the desperate situation which their members find themselves in as fuel costs continue to spiral upward. Both organisations however see themselves in different places with regard to their ability to influence government policy.

In Britain the RHA yesterday spoke out following the news that the UK has effectively returned to recession with the economy shrinking by 0.2% in the first quarter of 2012. The organisation’s Chief Executive, Geoff Dunning said:

“Of course we are disappointed at the news that the UK has returned to a state of recession. However, what comes as an even greater disappointment is that this news is not unexpected. If Government would heed our advice and address the issue of fuel duty once and for all, this is a situation that could almost certainly have been avoided. Users of petrol and diesel fuels are desperate to see a reduction in fuel duty. The price of a tank of fuel would reduce and the subsequent savings would be put back into the economy, giving trade the boost it so desperately needs.

“The barrel price of oil now stands at its lowest for quite some time. In addition, exchange rates are holding up well. Despite this, forecourt prices are still too high, with the margin on diesel having risen from 3.48ppl in March to 7.65ppl today. This is an increase of 123% or more than the August duty rise. This issue will not disappear but, approaching it in common sense way will go a long way to helping increase spending and subsequently increase GDP. We must tackle this issue head on, only then will we see an increase in GDP in the next quarter.”

Meanwhile across the Irish Sea the IRHA issued a statement regarding their ongoing negotiations with the Department of Finance Working Group regarding the possibility of obtaining an Essential User Fuel Rebate for licensed road haulage operators and to tighten up on the availability of Marked Gas Oil which is used in the fuel laundering process. The common practice of tampering with this ‘Green Diesel’ also known as 35 second oil (red diesel is the UK equivalent) potentially costs the Irish economy huge sums in lost VAT as it attracts a rate of only 13.5% - 10% lower than standard road fuel and is sold on by unscrupulous dealers following treatment to make it appear 'normal'.

The Association has now reached the final stage of the negotiating process with the Working Group and a recommendation to Minister Noonan is expected to be submitted in the next two weeks by Department officials. The hope is that government will grant bona fide haulage operators a discount on their fuel purchases thus keeping the price of finished goods lower and enabling many hauliers who cannot increase prices in business to survive. Speaking after yesterday’s meeting President of the IRHA Mr Eoin Gavin said:

“The Department of Finance have acknowledged the importance of the road haulage industry to Irelands export economy and our overall economic recovery. The current cost of fuel is now reaching epidemic levels and information from exporters suggests that the ever increasing cost of fuel is beginning to have a dramatic effect on export loads.

“Haulage is essential for the day-to-day business of a functioning economy and we plead with Government to adopt the essential user fuel rebate, which is currently in place in other Member States, in order to protect the haulage industry and therefore facilitate our economy recovery”.