demonstrating against rising fuel prices

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diarmuidc

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Has anyone been following the fishermen's protests? They are demonstrating in part against rising fuel prices and they want some financial help.

I heard a junior minister claim that no tax is paid on the fuel used in fishing boats but could not verify that? Is this true? If it is what are the fishermen hoping for? We grow our own diesel? Other tax payers subsidise their operations?
 
diarmuidc said:
If it is what are the fishermen hoping for? We grow our own diesel? Other tax payers subsidise their operations?
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I believe hauliers are 'angling' for something similar. Jimmy Quinn President of the IRHA (at least I think that's who I think it was) was on the radio saying "it's not just us, it's everybody - bus operators, fishermen, the ordinary public - we're all paying for it".

Maybe the solution is to subsidise everybody and anybody who needs a handout in some way shape or form?
 
There are 16,000 road hauliers in this country, compared to two million motorists. Nobody is seriously advocating fuel tax cuts for motorists, but there is a definite case in favour of such measures for hauliers because increases in their cost base invariably feed into consumer price inflation. It will be interesting to see how soon the "rip off Ireland, moan moan" brigade come out to support the hauliers.
 
ubiquitous said:
Nobody is seriously advocating fuel tax cuts for motorists, but there is a definite case in favour of such measures for hauliers because increases in their cost base invariably feed into consumer price inflation.
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This is not strictly true. No more than you can assert that "Higher food prices invariably mean higher wages". It would be more accurate to say "Higher food prices mean higher wage demands".

Equally I would say that increased haulage costs will see companies attempt to pass these extra costs onto the customer in the form of higher prices. However, it remains to be seen whether they can actually do so successfully.

If the government reduces the tax on fuel for hauliers to zero, leading to a 25% in their fuel costs but the market price of fuel increases 50% in the next six months, what will be their next call? Subsidies? Price freezes?
 
room305 said:
This is not strictly true. No more than you can assert that "Higher food prices invariably mean higher wages". It would be more accurate to say "Higher food prices mean higher wage demands".
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I stand by my original assertion. If you want to nitpick, then good luck to you.

room305 said:
If the government reduces the tax on fuel for hauliers to zero, leading to a 25% in their fuel costs but the market price of fuel increases 50% in the next six months, what will be their next call? Subsidies? Price freezes?
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This sort of hypothesis can be used to argue against any policy action. It has no relevance until or unless it becomes true. Which is not the case at present.
 
ubiquitous said:
but there is a definite case in favour of such measures for hauliers because increases in their cost base invariably feed into consumer price inflation.
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Maybe but I think you are just putting off the inevitable. The fact is, that oil is a limited commodity that will run out eventually . So we are going to have to face the fact that energy costs will increase and will impact us.

ubiquitous said:
It has no relevance until or unless it becomes true. Which is not the case at present.
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Yes but looking at the recent movement in the oil prices it's quite a distinct possibility.
 
Protesting against fuel price increases is like protesting against the tide coming in.
I compete with companies in China. Should I be compensated when they undercut me? Should I be compensated when a new piece of environmental legislation increases my cost base? Should I be compensated when an increase in the minimum wage has a knock-on effect on the wage demands that my staff make and make me less competitive?
The answer is of course “No”, so why should others who find their cost base increasing?

So what’s the solution? Fisherman will have charge more for fish and hauliers will have to charge more to drive stuff around the place. It’s that simple.
 
I was thinking during the week, that this is like Nature reasserting itself. Oil runs out, so the seas get a bit of a break.
 
Purple said:
Fisherman will have charge more for fish and hauliers will have to charge more to drive stuff around the place. It’s that simple.
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That's exactly the point. That said, one cannot ignore the fact that governments extract substantial revenues from duty & VAT on oil, based on decisions that were made at times when the price of oil was a small fraction of today's and tomorrow's levels.

The same governments profess to be concerned about inflation. If they are so concerned about inflation, then in my opinion they should be carefully examining whether the "high taxes on oil" policies that they pursued in previous decades are still appropriate today.

If they are happy to allow inflation to soar, let them admit this to the people.
 
ubiquitous said:
I stand by my original assertion. If you want to nitpick, then good luck to you.
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I apologise if you perceived it as nitpicking but I think there is an important distinction between the two. As an employee, if I find that the profit from selling my labour is decreasing because of rising costs (e.g. mortgage/rent increases) then I can pursue a number of options to redress this.

1. Lobby my employer to increase my pay.
2. Lobby the government to offset the cost in some way (e.g. tax relief).
3. Make more efficient use of my existing wages by cutting costs in other areas.

It is by no means a certainty that rising costs will lead to higher wages, which in turn leads to higher costs for my employer, passed on to his customers who in turn look for higher wages from their employers and so on. Inflation is not a perpetual motion machine.

Since the haulage industry has the exact same options open to it as this hypothetical employee, I have to wonder have they examined option 1. (passing on costs to their customers) or 3. (cutting costs in other areas). If both these options are an impossibility then it is less a prudent measure to prevent consumer price inflation and more a taxpayer bailout.

ubiquitous said:
This sort of hypothesis can be used to argue against any policy action. It has no relevance until or unless it becomes true. Which is not the case at present.
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Oil is a very volatile commodity. It has more than tripled in the past five years. Does it really make sense to assume the current price will remain static for any reasonable length of time? What if the price falls 50% over the next six months? Will the road hauliers gladly accept a reinstatement of the same fuel taxes?
 
room305 said:
What if the price falls 50% over the next six months? Will the road hauliers gladly accept a reinstatement of the same fuel taxes?
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They have before. It isn't that long ago since the government knocked 5c per litre off the price of diesel in one budget, only to put it back on again in the next.
 

High taxes on oil reduce inflation not increase it. In the same way that higher borrowing costs are not inflationary but deflationary.

I think there is a general misunderstanding of what inflation is in this country. It has to do with the value of money rather than the price of what you can buy with it (although you can use one to observe the other). If I buy the work of an artist who subsequently dies and the price of that art increases, it is not inflation. It is a repricing of the piece because we know no more of them can be made.

Similarly, if there is less easily extractable oil available then it is natural that the price will rise to reflect the changing supply/demand balance. In which case lowering the tax levied on it will only help subsidise consumption of an increasingly precious resource at the behest of future generations.
 
room305 said:
Will the road hauliers gladly accept a reinstatement of the same fuel taxes?
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Not necessarily, but will they have any choice? The government will certainly not lack moral authority (and, I would argue, widespread public support) if they take appropriate steps to prevent the hauliers from profiteering in this way.
 
room305 said:
High taxes on oil reduce inflation not increase it.
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This goes against the conventional wisdom of the economics fraternity in relation to the experience of inflation during the oil price shock era of the 1970s. In that case, high oil prices were widely blamed for rampant general price inflation in goods & services.

http://en.wikipedia.org/wiki/1973_oil_crisis

 
It's not just fuel tax breaks they are looking for but any concessions that will help them stay in business. Free use of the M50 for example would allow them to save thousands per annum and this could easily be reversed whenever things pick up.

It's also not a simple case of increasing prices as it's very a price sensitive competitive area. Hauliers need a haulage licence and all the requirements that go with that. However the industry is being overrun by builders, taxi drivers and eastern europeans who have bought themselves a big van and are undercutting the hauliers.
 
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