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Grounds for complaint over State’s use of oil levy

Fuels for Ireland says the State has put in place a ‘discriminatory fiscal measure’ that gives rivals a competitive advantage

Fuels for Ireland says its members accept that oil companies should contribute to the climate fund but that it should be via a carbon tax, which would also capture contributions from its non-oil energy competitors. Photograph: Dara Mac Donaill

Tue Jul 6 2021 - 05:33

If he didn’t already have enough on his plate dealing with Covid-related air travel restrictions, Green Party leader Eamon Ryan now has to contend with a State aid complaint made to the European Commission by the oil industry in his capacity as Minister for the Environment and Climate.

Fuels for Ireland, which represents 10 of the Republic’s leading oil retailers and distributors, claims the State has put in place a “discriminatory fiscal measure” that gives competitive advantages to rivals involved in gas, solid fuels and electricity from non-renewable sources.

This is a reference to the fact that the Government is planning to divert income from a 2 cent-a-litre levy charged on home heating oil and petrol and diesel sold at the pumps for its €500 million Climate Action Fund.

This levy dates back to 2007 and was put in place to pay the operating costs of the National Oil Reserves Agency (Nora) , which was established to manage the State’s international obligation to have 90 days of oil reserves on hand at all times.

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According to Fuels for Ireland, the levy last year generated €120 million, while Nora’s costs amounted to between €40 million and €45 million. It says the surplus that has accumulated over the years amounts to €300 million, which the State is now planning to divert to the Climate Action Fund.

Fuels for Ireland said its members accept that oil companies should contribute to the climate fund but that it should be via a carbon tax, which would also capture contributions from its non-oil energy competitors.

This seems a reasonable suggestion.

Of course, the people who have most grounds for complaint are home owners and motorists who have been paid this levy, or tax, when using oil products over the past decade and a half. All the more so as it would appear they have been overcharged to the tune of €300 million over that period.

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