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Agriculture, Food and the Marine | To ask the Minister for Agriculture; Food and the Marine the extent to which his Department continues to strive to ensure a dramatic reduction in the price of marked gas oil which is essential for the agri-food sector

To ask the Minister for Agriculture; Food and the Marine the extent to which his Department continues to strive to ensure a dramatic reduction in the price of marked gas oil which is essential for the agri-food sector; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.


For WRITTEN answer on Thursday, 26 May, 2022.

* To ask the Minister for Agriculture; Food and the Marine the extent to which he and his Department continue to monitor the exorbitant rise in price of marked gas oil and its ability to seriously damage output in the agri-food sector; and if he will make a statement on the matter.

– Bernard J. Durkan T.D.


For WRITTEN answer on Thursday, 26 May, 2022.

REPLY


In the context of the Ukrainian crisis, significant implications are being seen across all sectors, including the agri-food sector. At farm level, the crisis is already impacting very significantly on the price of fertiliser, animal feed and fuel.



Within my Department, I have established a Rapid Response Team to actively monitor the impacts on agri-food supply chains and to contribute to the whole of Government response.



I also established the National Fodder and Food Security Committee headed by Teagasc and tasked it to prepare an industry response and to develop contingency plans & advice to assist farmers in managing their farm enterprises.



I have announced a number of measures over the past three months to assist the agriculture sector and am currently considering what additional measures will be necessary.



Fuel has seen a very significant price rises in recent months. While primary responsibility for the taxation of fuel is with the Minister for Finance, I continue to work closely with him to ensure that the tax code reflects the Government’s priorities for the agri-food sector. Ireland’s taxation of fuel is governed by European Union law as set out in the Energy Tax Directive and the Finance Act 1999 provides for the application of excise duty, in the form of Mineral Oil Tax.



As the Deputy may be aware, gas oil that qualifies for a reduced rate of Mineral Oil Tax is marked green and is usually referred to as Marked Gas Oil (MGO), green diesel or agricultural diesel.



Mineral Oil Tax is comprised of a non-carbon component and a carbon component. The carbon component is commonly referred to as carbon tax and the non-carbon component is often referred to as “excise”. In March this year the Minister for Finance reduced the excise rate on agricultural diesel by 2 cents per litre and then again by an additional 3 cent from 1st May. This total reduction of 5 cent reduces the non-carbon component, or excise, to nil.



The current rate of Mineral Oil Tax on agricultural diesel is €111.14 per 1000 litres. This compares very favourably to the current rate applied to auto diesel which is €405.38 per 1000 litres.



It should be noted that those who incur expenses in relation to farm diesel in the course of farming or the trade of agricultural contracting may claim an income tax or corporation tax deduction for these expenses, including any carbon tax charged in respect of the diesel.



I also note that Section 664A of the Taxes Consolidation Act 1997 provides further relief on expenditure incurred by farmers in respect of an increase in the carbon tax on farm diesel. As well as an income tax or corporation tax deduction for farm diesel, a further deduction for farm diesel which is equal to the difference between the carbon tax charged and the carbon tax that would have been charged had it been calculated at the rate of €41.30 per 1,000 litres of farm diesel (the 2012 baseline), is allowed.



I continue to engage with all our stakeholders and continue to work across Government, and with our European partners, to respond to this crisis, using all of the tools at our disposal. I am taking a very proactive approach to the crisis in Ukraine. We must protect our agri-food sector through this period of significant upheaval. 



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Agriculture

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