Petroleum Infrastructure of Ireland. Petroleum infrastructure Irish Petroleum Industry Association.
Post on 15-Dec-2015
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Irish Petroleum Industry Association
Representative body of those companies in Ireland engaged in the importation, distribution and marketing of petroleum products.
95% of the oil industry in the Republic of Ireland.
Recognised by Government as the representative body for the industry.
Promotes the understanding of the industry’s contribution to economic, technological and social progress.
Public policy - IPIAClimate change, IPIA supports rational policy. We cannotother EU policy: be expected to outperform EU
Illegal trading: Working closely with Revenue and others
Regulations: Enforce across the board
Security of supply: Work with National Oil Reserves AgencyPractical measures to GovernmentRemove the Irish oil excise anomaly
Economic growth: Main energy source, efficient infrastructure
What Ireland relies on
Sustainable Energy Authority of Ireland: Final Energy Demand
Petroleum remains important to Ireland
2010 petroleum 61% 2020 petroleum 58%
Petroleum industry in Ireland
Multi National Irish Multi National Irish
Now mainly independent and Irish
1990 2013
Loss of multinationals
Ireland security of supply has diminished
Independent oil companies less resilient to oil shocks- can become financially stretched- security of supply is less strong
Resulting threat to economic stability
Ireland
On western EU seaboard - ill placed in supply chain
Less…… reliant on upstream parent multinationals
More…… dependent on Irish banking facilities
Problem compounded by
Malfunctioning banking system. Banks don’t meet required credit rating status for suppliers
Sovereign debt crisis. More difficult to obtain credit to fund import of oil products
Cost of oil products. Considerable increase
… and on top of that…
Alcohol:
Tobacco:
Oil:
The Irish excise anomaly
Payment at the end of the month following delivery
Payment ninety days after the product is delivered out of bond
Payment as it leaves bonded terminal.
Companies pay excise tax before it can receive payment for product.
No duty deferral.
Nobody defends the anomaly…
The Commission on Taxation Report of 2009:
“The absence of a deferral period imposes an unfair burden on the industry and is contrary to the mechanism in some other EU Member States and to the collection mechanism for excises on other receipts such as alcohol and tobacco” (section 5.3.4, page 135).
IBEC has drawn this to the attention of Government in every one of its Budget submissions since 2007.
Government Departments say it is just there ‘for historical reasons’…
Priorities
Energy: About 60% is from oil Independent Irish companies
Credit crisis Tax paid before customer sees it
Alcohol: Excise duty deferred
Tobacco: Excise duty deferred
Consequences
The Irish excise anomaly encourages
industry to have as little product as possible at the end
of the distribution line; bulk storers and retailers to
minimise stock levels outside bond; companies to
minimise what they have taken out of bond and
distributed;
small quantity truck deliveries - therefore more truck
deliveries, increased traffic congestion, more emissions;
higher prices to consumers;
effect on Ireland’s security of supply.
Excise collection
Only Ireland has an excise collection system which
favours credit conditions for alcohol & tobacco over oil.
has this anomaly
no one defends.
and has Governments which choose to leave it this way.
Pump price – more than half is tax
Petrol at €1.59 Diesel at €1.53
Tax is 58% Tax is 53%
Prices from most recent AA survey – December 2012
29.73
4.59
54.18
1.80
0.16
2.00
66.54 VAT
Carbon
Excise
Biofuel
Energy
NORA
Untaxed
28.61
5.33
42.57
1.800.162.00
72.37
High tax regime for oil
Economic policy
Peripheral country, dependent on exports
Strain on economic activity & growth prospects
Transport industry (haulage ) very fragile
Power of hypermarkets & multiples to resist rising fuel prices.
Illegal washing of diesel
• €155 m per year lost to Exchequer in fuel duty alone
• High cost of repairing environment from waste washings
• Damages vehicles of unsuspecting consumers
• Difficult for legitimate oil industry to compete
IPIA is working with the Department of Finance, the Revenue Commissioners, the Garda Siochana and others to tackle this major problem.
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