Author Archives david.blevings@ipra.ie

Up to 100 roadside service stations, many described as hubs of rural villages around the country, are facing closure because of an “extortionate” hike in commercial rates, owners are warning.

With some family-owned stations facing five-fold increases in their yearly bills, preparations are under way for a European Court of Justice challenge against the revaluation.

Martin McSorley, of the Irish Petrol Retailers Association, said around 100 independently-owned stations were threatened with closure, while many more would be swallowed up by the big fuel companies.

“A lot of businesses won’t make money, there will be no profit left,” he said. “There are rural sites particularly that don’t have enough business to keep them going.

“They would probably be the only shop and maybe the only business in the village. Some of them house the post office, they are the hub of the community. We would be seeing villages with no services.”

The Valuation Office is carrying out a national revaluation of all rateable properties.

Newly revised bills

In recent weeks, newly revised bills have been dropping through the doors of more than 30,000 businesses in Cavan, Fingal, Louth, Meath, Monaghan, Tipperary, Wexford and Wicklow.

Service stations were traditionally assessed for commercial rates based on the size of their retail space, but under the revaluation they are now being assessed on their sales turnover.

Mr McSorley, who owns service stations in Laois, Carlow and Wexford, said the rates have been set too high because profit margins were so small in the industry, while they were also being unfairly targeted compared to other retailers.

“Why only us? Why not apply it to Lidl, Aldi and Tesco and Dunnes?” he asked.

“If I have a Spar shop across the road from me that doesn’t have petrol pumps, his rates will stay at around €8,000 or €9,000 a year, while mine are going to go up to €38,000. How is that fair?”

Mr McSorley said the new rates would shut at least one of his five service stations, which just about breaks even, yet the rates bill has more than doubled from €18,000 to €38,000.

“They want 4 per cent of everything I sell in my shop. Some things I don’t even make 4 per cent profit on. It is very unfair. It is forcing us to make a loss on a large amount of items in our shop.

“We are not opposed to paying rates – we are looking for a fair deal for everybody.”

Big fuel companies

There are about 1,500 petrol stations left in Ireland. Around a third are independently-owned, with the rest operated by big fuel companies such as CircleK, Applegreen and Maxol.

Mr McSorley said many smaller businesses were refusing to pay the new rates bill, were paying the old amount instead and lodging appeals, which could last up to six months, with subsequent tribunals taking up to two years.

“The rural areas are the biggest problem. Most of those sites just about break even. They wouldn’t make the same margins on fuel that would be made in Dublin.”

Supermacs founder Pat McDonagh, whose company operates seven service stations, is spearheading plans to take the Government to court in Europe over the rates increase.

“It is just inequitable, it is unjust, it is unfair,” he said. “It is kind of extortionate to a degree that you have anything up to 500 per cent of an increase. No one can justify that.

“The rates valuation guys won’t listen to us. The council won’t listen to us – so you have to go somewhere with your case, where you will get a fair and equitable hearing. As far as I am concerned Europe is the best place to get that.”

Fast food giant

Mr McDonagh, who recently won a trademark challenge against global fast food giant McDonald’s at the European Court of Justice, said work has started on building funds to finance a case for service station owners.

“They will look at it on a level playing field basis and decide if this is anti-competitive or not,” he said.

In response to a complaint in the Dáil from Fine Gael TD Kate O’Connell that the hikes were “grossly unfair”, Minister of State John Paul Phelan said he “fully accepts” the arguments being made, and, although the Commissioner of Valuation was independent, “there are a number of things that need to be looked at again” .

“I am acutely aware of the importance of service stations, especially in rural villages where they may be the only commercial premises in some areas.”

Drive offs (were customers do not pay for fuel) costs the retail forecourt sector in excess of €3M per annum and the industry is proposing a new system to combat this problem.

Scan Cam, a solution that has been developed in Australia and New Zealand is coming to Ireland and will launch at the IPRA Expo next week in CityWest.

David Blevings, IPRA spokesperson said, “We are seeing very positive signs of a recovering and thriving economy with a huge increase in convenience sales. However there is a still a major problem with drive offs and we hope to launch this new system that will resolve the problem and also free up Garda time which could be better used elsewhere.

The modern forecourt is now a specialist convenience store with fuel becoming a secondary or even tertiary product.  At this years expo we have everything under one roof for the forward thinking operator from the environmentally friendly reusable coffee cup to new food to go ideas. In addition, we have the major fuel brands, associated service providers and industry relevant seminars including a showcasing of the app which will remove the stress involved in refilling your car if you are a disabled driver.

Míchael Ó Muircheartaigh, the legendary Gaelic games commentator will open the event in CityWest and it runs from 10am to 5pm on Thursday 14^th March and retailers and the general public are welcome to attend”, added David

The Irish Petrol Retailers Association (IPRA) has welcomed the news today in Budget 2019 that there is to be no increase in carbon tax or fuel duties.

IPRA has been proactive in the run up to the Budget 2019 meeting, writing to the Minister for Finance and Public Expenditure, Paschal Donohoe, to advise him against increasing tax or fuel duties.

David Blevings, IPRA spokesperson said, “Government indicated at a recent Project 2040 event that they proposed to part-fund public transport and energy efficiency with an increase in the cost of petrol, diesel, home heating oil, gas and briquettes. While the promotion of public transport and energy efficiency are very positive and pragmatic issues for the consumer, cost effective day to day mobility, especially for rural dwellers is probably a more practical issue in Ireland today.

We are glad to see that common sense has prevailed and motorists will welcome and benefit from this decision”, added David.

David Blevings, IPRA spokesman said, “We are seeing pressure again on global oil prices due to a number of factors; the recent fallout at the OPEC meeting over attempts to increase supply, increased demand for oil and the prospect of US sanctions on Iran which come into play next month. The concern is that OPEC and non OPEC countries may not be able to pick up the slack from the ‘lost’ Iranian supply. All of these factors continue to push the price of oil upwards with crude recently passing the £80/barrel mark which unfortunately has resulted in recent hefty increases at the pumps”.

Looking ahead to the Budget we note that at the recent Project 2040 event Government representatives said they will part-fund public transport and energy efficiency under the National Development Plan with an increase in the cost of petrol, diesel, home heating oil, gas and briquettes. Minister Naughten went further in a recent article and claimed that oil should be priced out of the market by 2030 to encourage people to adopt electric vehicles and energy efficiency suggesting a barrel price of €200/barrel as a baseline.

IPRA has urged the Minister not to raise duty rates in road fuels this year due to the current high cost of oil as any increase could offset the local economic recovery which is well underway and penalise rural car users.

“The recent increase at the pumps is unwelcome news for consumers and retailers who have no choice but to pass on increases in their wholesale costs. There is speculation that we could see further increases and claims of $100/barrel by the end of the year look unfortunately more realistic than we would like but the US has indicated that they may release some of their strategic oil reserves if oil peaks at $100/barrel which may see prices reducing in the medium term”, added David.

David Blevings, IPRA spokesman said, “We are seeing pressure again on global oil prices due to a number of factors; the recent fallout at the OPEC meeting over attempts to increase supply, increased demand for oil and the continued aggression in the Middle East all continue to push the price of oil upwards with crude recently passing the £80/barrel mark.

Looking ahead to the Budget we note that at the recent Project 2040 event Government representatives said they will part-fund public transport and energy efficiency under the National Development Plan with an increase in the cost of petrol, diesel, home heating oil, gas and briquettes. IPRA has urged the Minister not to raise duty rates in road fuels this year due to the current high cost of oil as any increase could offset the local economic recovery which is well underway”.

The Irish Car Wash Association (ICWA) has questioned why Government and Irish Water have not taken action against unauthorised car washes following the recent exceptional dry spell and the prospect of water bans across the country.

The recently formed industry body that spawned out of the Irish Petrol Retailers Association represents petrol retailers operating car washes in Ireland.

Spokesperson David Blevings said, “We are well aware of the need to conserve water given the current conditions but why has Irish Water and Government not done more to tackle the unauthorised car wash industry in this country. A report commissioned in 2004 estimated that there are up to 3000 unregulated washes throughout the country and with each wash using up to 150 litres for every wash, an unregulated wash can easily exceed 1.5M litres of water per annum.

Our Members cannot compete with operators who are not meeting the same requirements as them and set up on derelict sites/car parks/roadside verges and offer the same service (at a knock down price). Many have no valid planning/waste disposal/insurance in place and in some cases, washes are known to use slave labour and allegedly do not have proper procedures in place for tax/VAT and PRSI payments”.

IPRA has lobbied the Department of Communications, Climate Action and Environment for a licensing scheme for local car washes but to no avail. Ironically, Revenue indicate they would support a licensing requirement but require a Government Minister to introduce it”.

ICWA says making licensing a legal requirement would ensure all car washes are registered, are using water correctly and disposing of effluent within current guidelines and more importantly, not wasting our valuable water resource.

“Rather than talk about introducing water bans that take seven days to notify consumers, Irish Water should take a long hard look at their current system as it would appear to ICWA that it is not fit for purpose and review how better they can work with local Councils, Revenue, EPA and other parties to ensure the car wash trade is compliant with current regulations, look to introduce incentives for rain water harvesting and encourage recycling to ensure the water is not wasted”, added David.

Unfortunately, we are seeing an increase in local fuel prices. This is a result of inflated crude and wholesale fuel prices due to the current round of sabre rattling in the Middle East. Any sign of discontent in this region is usually bad news for oil prices as the threat of reduced supply spooks the market and pushes prices up.

Speculation is we could see $80/barrel by the summer and with OPEC and non-OPEC countries threatening to further tighten supply, this could be a reality.  Of course this is good news for Saudi Arabia who are preparing to float Aramco. However, the oil nations need to play a balanced card as increasing prices too high will force more and more motorists around the world to switch over to electric vehicles reducing overall oil demand.

The one bit of positive news is that as global oil prices rise, US shale production becomes more viable and we will see shale make an appearance to assist push prices back down.

Looking forward we see the tension in the Middle East reducing as discussions there reach a peaceful solution and American shale production ramps up pushing prices back to the $50-60/barrel range. We would be confident that prices will return to a more ‘normal’ level  by the end of the year.