Another fuel crisis looms for contractors

Facing into an autumn of potential discontent over fuel prices, some agricultural contractors are calling for a cap on diesel prices to allow them some certainty in pricing jobs over the coming months.

Ballina-based agricultural contractor Conor Finnerty wants the government to hold off on any re-imposition of fuel excise duty but also wants a price cap so contractors can budget. 

“We need it at €1.05 or €1.10 when you are doing roadwork or slurry. If you have the certainty you can budget...” 

With five tractors, two balers, two mowers and two tankers – as well as four diggers – to keep fueled, Conor is facing an uncertain autumn.

In recent weeks fuel prices have risen sharply as the US-Iran accord has unravelled and the conflict has entered an unpredictable phase. 

“Climb, climb and climb,” is how Conor is seeing prices movements on agricultural diesel. “If this increase (reimposition of excise duty) comes on it will cripple everyone.” 

The recent price rises came after a relative calm in the summer months helped by hopeful signs of an end to the Middle East conflict prompted by US attacks on Iran.

“It was bad enough in May, then it settled at around €1.05 or €1.10 a litre for green diesel,” Conor explained. “But my last fills were €1.40 and €1.42 a litre so that’s expensive… I was very lucky to get a fill before it skyrocketed. Some lads were paying €1.50 and even €1.70.” 

A €600 million government package to ease pressure on contractors and hauliers has been underwhelming for Conor. 

“Yeah, I got some back, but it was less than half of what I was expecting to get.” 

Fine weather made for a busy summer. 

“There was a good volume of work this summer. The first cut was a few weeks late but there were great crops and then later in the summer there was three or four very good weeks and we got a lot done.” 

But Conor had to raise his prices by two to three euros a bale to cover the rising cost of diesel and the related jump in other inputs like oil, parts and grease - price hikes driven by higher oil prices.

“We want the government to recognise there’s a problem and then to talk to us,” explained Kilmaine-based JJ Walsh, who contracts for farmers across South Mayo and North Galway. “Talking is the only way through a crisis."

JJ has seen a 40 cent rise in the price of green diesel over the past three weeks to a current €1.50/litre, creating a “serious impact” on his business. He also wants government to revisit the fuel support scheme for agri contractors like himself. He has received 40% of what he had expected to receive under the scheme. This, he explained, is because payments to contractors are averaged out over 12 months but because contractors are prevented from spreading slurry or manure for the winter period there is lower fuel use than in other months. 

“When they came out with the original plan we were to be paid based on our fuel usage over the five-month period. March to July, those are the five months during which the bulk of the work is done on farms.” 

JJ doesn’t support a price cap on fuel. 

“Diesel would likely be kept at the maximum price allowed all the time even if the price of a barrel of oil dropped in the meantime,” he explained.

The unpredictability of prices is making it very difficult to price jobs for clients. 

“If you gave a man a price three weeks ago it will be different today.” 

The recent increase in diesel prices will force contractors to increase prices by 15%, said JJ. 

The unpredictability of fuel price movements is adding much stress to his work. 

"You can’t change prices every day, you have to work on a weekly basis."

His agricultural clients, however, are also under financial pressure due to a shortage of feed caused by the summer drought. Grass yields are down 30% because of the drought, meaning his own turnover is down by a third too. 

“It’s a double-edged sword,” said JJ.

Contractor Noel Kelly in Foxford is worried diesel will soon be €2 per litre. 

“Diesel is going up, you have to put up the rate, it is what it is.” 

He puts €300 to €450 worth of diesel a day into his tractor. 

"Depending on the work you are doing it might last a day and half." 

Fuel costs are similar for the diggers he drives on site works.

Higher prices are prompting farmers to postpone or cancel jobs. 

The fuel price surge could prompt or contribute to a recession, said Noel as he sees housebuilding projects being stalled with home builders struggling to absorb the higher costs of site works. 

"The price of clearing a site now is crazy,” he explained. 

But contractors have no choice. 

“You can’t be operating at a loss,” said Noel.

Baling silage outside Westport town, contractor Stephen Roache is worried any further rise in the cost of diesel will put him out of business. He’s facing diesel prices of €1.50 per litre. 

“It was less than a euro this time last year, if it goes any higher it’ll be the end of me in this business, you can’t pass it on, they [clients] can’t afford it.” 

The fee to make a round bale rose from €13 to €14 in 2025 to €18 currently, Stephen explained.

"Any more than that is just not affordable for the farmer.” 

Payments from the government’s fuel support scheme for contractors like him may be too little too late. 

“It’s cost me as much on paying the accountant to prepare the application than what I will likely get out of it.” 

Stephen worries that high diesel prices, and the inflation they've driven, may be here to stay. 

"Anything that went up that much won't come back down."