The effect of the cut in excise duty on green diesel will be undone just seven weeks after it was introduced, a Sinn Féin TD has said.
Sinn Féin’s spokesperson on agriculture Matt Carthy, said the carbon tax element of excise duty on agricultural diesel is set to increase on May 1, which will undo the 2c/L cut on the fuel, introduced on March 10.
The cut, which was introduced in response to record pump prices, brought the cost of marked gas oil, more commonly known as green diesel, from €138.17 down to €120.55/1,000L. However, the move was widely considered insufficient at the time.
When the carbon tax increases on May 1, the price will return to €138.17. This was confirmed by the Minister for Public Expenditure Paschal Donohue at the oireachtas finance committee.
“He acknowledged that the excise take on agri-diesel will return to its March 9, level in May and that it will then increase further to €158.50 in September when the temporary measure expires,” Carthy said.
According to the TD, the figures are not impacted by Russia’s invasion of Ukraine or by any other international or global factors.
“This is the money that government is charging on agri-diesel that they could and should reduce,” he said.
“Essentially, farmers and farm contractors have got seven weeks of a minimal fuel reduction at a time when input costs are pushing them to the brink.”
Tax rebate on green diesel
Some farmers can avail of a carbon tax rebate if their income is sufficient, however, farm contractors are not eligible for the same provision, despite them carrying out agricultural work.
Carthy said he has sought clarification from Minister Donohue that a review into this is underway. He said:
“Contractors have no choice but to pass on the charge to their customers, effectively making it an additional cost to farmers.”
A review of this status was promised in 2019 but was repeatedly deferred according to Carthy. However, it has been confirmed that it is now underway and will be completed prior to the budget in October (2022).
“When pressed [the minister] would not commit to bringing forward measures in the budget arising from that review.
“There can be no further delays. During a period of escalating input costs, farmers need support. One such support must be through a rebate of the carbon tax for those doing essential agriculture work for which there is no fuel alternative yet,” Carthy finished.