IRHA calls for fuel duty relief

A delegation from Irish Road Haulage Association (IRHA) met with Finance Minister Brian Cowen at the end of July in a bid to secure a reduction in excise duty on diesel for licensed and tax compliant hauliers. Irish Trucker reports.

IRHA president Vincent Caulfield

The cost of diesel in Ireland has appreciated by 14 per cent in the past 12 months, according to figures compiled by the Automobile Association. At the end of August the average price at service stations across the country was £1.10 per litre, an increase of 18 cent on the corresponding month in 2004.
The surge in pump prices can be attributed to the relentless increase in the cost of crude oil, combined with the appreciation of the dollar against the euro since the beginning of the year.

Throw in China’s seemingly insatiable demand for crude oil, and OPEC’s reluctance to increase production and the reasons for the fuel crisis that is threatening world economic growth becomes all too apparent.
Against this backdrop the IRHA met with Finance Minister Brian Cowen on July 21 to impress on him, in the strongest terms, the crisis that is now facing the Irish haulage industry as diesel prices continue to set new all-time highs.
The IRHA delegation led by president Vincent Caulfield, told the Minister that scores of hauliers have been forced out of business in the past 12 months as a result of spiralling diesel prices.

Finance Minister Brian Cowen

In a frank address Caulfield told the Minister that many hauliers had used up all of their cash reserves, subsidising the running of their operations in the mistaken hope that the cost of fuel would abate
With all available indicators pointing towards continued escalating fuel costs, these hauliers now found themselves in a perilous position on the verge of going under, Caulfield revealed.
Prior to the December 2004 budget the IRHA met with the Minister, who said that spiralling fuels costs should be dealt with in the context of the market, rather than through the introduction of a reduction in excise duty.
The Minister told the association that hauliers needed to address spiralling fuel costs through dialogue with industry and said that negotiated fuel surcharges / rate increases were the only option open to hauliers.

In his July address Caulfield suggested that industry was abusing its dominant position in relation to setting rates. He commented: “It should be borne in mind that 75 per cent of all licensed hauliers are small hauliers with two vehicles or less. These people are ‘price takers’ who work for large businesses who make up bodies like IBEC and the CIF.”
He continued: “The bigger the transport buyer, the more ruthless the approach to cost control. The haulier is seen as the weakest link and the transport budget is the first place the axe falls.”
Caulfield told the Minister that many hauliers are “bullied and threatened into working for conditions that they are frequently powerless to change.”

However, Caulfield told the Minister that more militant hauliers, frustrated by the lack of support from industry were agitating for action, not seen since the rolling protests of September 2000 when parts of the country were brought to a standstill.
The Co. Roscommon haulier, who was elected as president of the IRHA in April, told the Minister that there was now a groundswell of opinion within the association for direct action in the form of protests.
“If this day comes to pass it would be a dreadful reflection on the IRHA for failing to prevent such an event and a dreadful reflection on your Government for allowing it to happen,” he revealed.

He added: “Hauliers are stoic by nature and slow to revolt. But when they do revolt they are impossible to control. Desperate situations require desperate remedies and it is unlikely that the IRHA management would be able to control a strike-type situation.”
Caulfield told the Minister that the association wanted him to act as a matter of urgency to implement an excise duty rebate scheme for licensed and tax compliant hauliers.

He said the association was seeking a narrow range of measures that would benefit only licensed and tax compliant hauliers. He elaborated: “I am not asking for any relief for the motoring public in general. There are plenty of other lobby groups in a position to do that. But I must press you to take immediate measures to bring some relief to my members.”
“It is simply not an option for you to sit on your hands and say your are powerless to act in advance of the next budget. Several of your EU colleagues have instituted rebates in recognition of the essential nature of road transport. Ireland of all EU countries is most dependent on road haulage to run its economy,” Caulfield pleaded.
The construction haulier told the Minister that it cost £1,050 for 1,000 litres of diesel, of which the Government collects £181.40 in VAT and £367 in excise duty.

An owner-driver covering 120,000 miles per annum would burn in the region of 73,000 litres of diesel annually. “His contribution to the exchequer in fuel duty alone would be £26,791. A fleet of 10 vehicles would contribute some £267,910 per annum before the owner of the business makes any profit. Clearly, there has to be some room for manoeuvre,” he asserted.
In the run up to last year’s budget Minister Cowen told Caulfield’s predecessor, Eamon Morrissey that any relief given to the haulage sector would be given at the expense of a school or a hospital.

However, Caulfield dismissed this suggestion. “ I cannot accept this argument. The vast sums of money, which my members contribute to the exchequer in VAT and excise duty makes the funding of lots of Government spending possible.”
He continued: “Delegates at our annual conference rejected this excuse out of hand and they have instructed me to re-open negotiations with your Department with a view to securing some sort of relief for the sector.”

Caulfield concluded his address by reminding the Minister that the haulage industry had “performed all that has been asked of it by all governments over the years and has succeeded in this without any State subvention whatsoever.”

“The present situation cannot be sustained any longer and it is incumbent on all the stakeholders to find a workable solution and avert a certain crisis. It is not that long ago that politicians of all shades were highlighting our ‘peripheral location’ and the difficulty of being an ‘island off an island’. Hauliers face an impossible task in delivering goods under the present circumstances,” he concluded.