Farm Ireland

Monday 18 December 2017

PAC seeks carbon tax suspension

Caitriona Murphy

Caitriona Murphy

Agricultural contractors have called on the new Government to suspend the carbon tax on farm diesel with immediate effect.

With green diesel prices now heading for a landmark figure of €1/l, the Professional Agricultural Contractors (PAC) has urged the new Fine Gael/Labour cabinet to temporarily suspend the €15/t tax on marked gas oil.

If implemented, a suspension of the carbon tax would immediately cut 4.7c/l from the cost of green diesel.

PAC director Tom Murphy insisted the move would not require any legislative change and the tax could be reinstated if and when diesel prices fall again.

Contractors have warned that they have no choice but to pass on the rising cost of fuel to farmers in contracting charges this year.


The combination of rising diesel prices and lack of credit from oil companies will result in tighter credit and higher work charges for farmers.

"We are advising our members to quote their contracting charge and add a surcharge for fuel," said Mr Murphy. "If fuel prices come back down again, that surcharge can be reduced."

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Alternatively, farmers could be asked to provide the diesel for the contractor when he arrives in the yard. This would reduce the need for contractors to seek payment for jobs immediately after they finish work.

Diesel prices moved up to 90c/l including VAT in the past week, with some quotes increasing by as much as 8c/l in seven days. Average prices are typically running €300 more expensive for 1,000 litres of diesel than this time last year.

While there has so far been no contact between the Road Hauliers Association and the PAC, several individual contractors have said they would join hauliers in a protest against the rising cost of fuel.

Indo Farming