The government has been told that the increase in fuel costs is having a “crippling” effect on some goods trading companies, requiring emergency tax measures to ensure “certainty of service”.
Presenting to the Finance Department, the Freight Transport Association Ireland (FTAI) said that the price of one liter of diesel has increased by more than 50pc in the last 12 months. The trade group said this was equivalent to raising the average fuel cost per kilometer to 50 cents from 33 cents in a distribution cost guide published in 2021.
On the increase, the FTAI wrote that it is “crippling for those whose contracts do not have fuel surcharges, but freight delivery is also detrimental to cash flow, especially when the fuel price curve is on a persistent upward and sharp trajectory.” “
The FTAI said there is also a “significant discrepancy in fuel pricing around Europe”, with the price in Poland 20pc cheaper than in Ireland.
FTAI urged the government to immediately introduce emergency tax measures to “offset the burden on all commercial fleet operators and ensure certainty of service”.
In the letter, the FTAI recommended that the government review the existing Diesel Rebate Scheme (DRS) to make it more accessible and suitable so as to ease some of the pressure on the freight and freight sector.
It claimed that less than a third of the eligible operators actively participate in the scheme.
The FTAI is exploring a plan to include the “own accounts” sector, which it said is responsible for most of the national retail and distribution of food and energy supply services.
It said the scheme should provide monthly payments during exceptional periods, such as now, and that the Central Statistics Office updates fuel prices more frequently.
FTAI called for reducing VAT, developing contingency plans for fuel shortage with all stakeholders and incentivising vehicles to run more fuel efficient.
It also requested fuel escalation clauses to become standard in all contracts for the toll holiday experiment and testing of tall semi-trailers to reduce overhead, saying it would eliminate driver shortages and reduce emissions. With rising fuel costs being felt by businesses in the global economy, Ireland is no different.
South African-listed grocery company Spar Group said last week its Irish business had delivered “solid performance” despite “unusual” labor, fuel and energy cost pressures.
The retail giant of the grocery group said that the cost control projects implemented for logistics will continue and logistics staffing remains a challenge.
FTAI in its submission also flagged the skill gap in this area. Last month, it played a role in launching a new commercial driving apprenticeship.