The Union of Farmers of Castilla y León (UCCL) has demanded "to stop patching" agricultural diesel and the implementation, as soon as possible, of a professional and stable supply system, with a permanent regime for diesel B intended for professional farmers and ranchers and with a minimum taxation applied directly at the pump.
In light of successive energy crises, UCCL argues that it is no longer viable to continue resorting to ad-hoc solutions in response to the rising cost of agricultural fuel and has urged the Government to promote "immediately" the work to establish an agricultural diesel reserved exclusively for professionals in the field and livestock farming.
According to the organization in a statement collected by Europa Press, the official national average price of diesel B, published by the Ministry for Ecological Transition, reached on September 2nd 1.561 euros per liter, compared to 1.130 euros recorded at the end of February, before the sharp rise in March. This implies almost a 40 percent increase compared to before the outbreak of the conflict in the Middle East.
UCCL emphasizes that these are average prices at the state level, so in some regions and supply points, farmers are encountering "significantly" higher rates. The official average is already just 13.2 cents away from the historical record of 1.693 euros/liter reached in March 2022 after the start of the war in Ukraine, the organization has recalled.
For the agricultural union, this situation once again highlights the "weaknesses" of a model based on reacting to each crisis with exceptional aid, temporary tax reductions, or subsequent tax refunds.
"Enough with patches: we want a true professional agricultural diesel with clear and stable rules," UCCL has stated, emphasizing that this demand is not new and is not limited to solving "today's problems," since "this is structural" and must be addressed by the Government "instead of spending years and years delaying until the next crisis."
The organization, which emphasizes that "it is a matter of political will," recalls that currently the ordinary regime for diesel B sets a Special Tax on Hydrocarbons (IEH) of 96.71 euros per 1,000 liters, from which certain farmers can later recover 63.71 euros, leaving an effective tax of 33 euros.
Increase the refund and apply the reduction at the pump
As long as this system is not changed, UCCL proposes that the refund be increased by at least another 12 euros per 1,000 liters, so that the effective rate is reduced to 21 euros, and that this reduction is applied directly at the time of refueling.
In addition, the organization reminds that community regulations allow going further, as Article 15.3 of Directive 2003/96/EC empowers member states to establish even a zero tax rate for energy products used in agricultural, horticultural, aquaculture, and forestry activities.
UCCL also warns that the current refund system presents serious access difficulties. It specifies that in 2024 only 118,189 applications were registered, a 9 percent decrease from the previous year, despite the fact that the consumption of agricultural diesel did not experience a proportional drop. Thus, only just over half of the gasoil B used in agriculture and barely 20 percent of its users benefit from the refund.
The organization adds that the increase in fuel prices automatically raises tax revenue. Just from VAT, going from an average price of 1.130 to 1.561 euros/liter implies approximately 7.5 additional cents of tax per liter, which, applied to 1.948 billion liters of agricultural consumption, translates to about 146 million euros more, according to their calculations.
In the face of this scenario, UCCL estimates that diesel with a VAT of 10 percent and an effective IEH of 21 euros/1,000 liters could generate savings close to 315 million euros annually in taxes for the sector, using that volume of consumption as a reference. An additional reduction of the IEH to zero, an option expressly provided for in European regulations for agricultural uses, would raise the savings to about 360 million euros and, if the measure were limited exclusively to professionals, the tax benefit would be 30 percent lower, thus reducing the impact on government revenue.
UCCL reiterates its request to the Executive to abandon the dynamic of improvised measures and to establish a genuine professional agricultural diesel with the least possible tax burden and with the discount applied directly at the pump, so that "it allows farmers and ranchers to work without having to bear these increases out of their pockets for not being able to pass the rise along the food chain".