Transcript Infrastructure

Petroleum Infrastructure of Ireland
Petroleum infrastructure
Irish Petroleum Industry Association
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 - IPIA
Climate change,
other EU policy:
IPIA supports rational policy. We cannot
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 Agency
Practical measures to Government
Remove the Irish oil excise anomaly
Economic growth:
Main energy source, efficient infrastructure
What Ireland relies on
2010 petroleum 61%
2020 petroleum 58%
Sustainable Energy Authority of Ireland: Final Energy Demand
Petroleum remains important to Ireland
Petroleum industry in Ireland
Multi National
1990
Irish
Multi National
Irish
2013
Now mainly independent and Irish
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…
The Irish excise anomaly
Alcohol:
Payment at the end of the month following
delivery
Tobacco: Payment ninety days after the product is
delivered out of bond
Oil:
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
29.73
28.61
4.59
66.54
VAT
5.33
72.37
Carbon
Excise
42.57
54.18
Biofuel
Energy
2.00
1.80
0.16
NORA
2.00
1.80
0.16
Untaxed
Petrol at €1.59
Diesel at €1.53
Tax is 58%
Tax is 53%
Prices from most recent AA survey – December 2012
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.
Petroleum infrastructure of Ireland