Michael Ahern (Cork East, Fianna Fail)

I speak on behalf of the Minister for Transport. The Government is aware of the importance of the fuel duty rebate scheme for passenger bus transport services. The current scheme is a matter, in the first instance, for the Minister for Finance and the Revenue Commissioners.

The background to this issue is that the 2003 EU energy tax directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of members states. In the Irish context, these derogations allowed for reduced rates to apply to fuel used for scheduled public and private bus services and bus tour services. While the derogations expired on 31 December 2006, Ireland and other member states sought retention of their derogations beyond that date. However, the European Commission, the deciding authority, has refused all such requests. The Commission maintains that, in keeping with the EU energy tax directive, member states must apply at least the EU minimum rates of excise on fuels in such circumstances and any further favourable excise treatment is not allowable. The Commission's decision was published on its website in March 2007. I understand the Minister for Finance will avail of the forthcoming Finance Bill to provide for the necessary legislative changes to conform with the directive.

As I stated, the Government is aware of the importance of the fuel duty rebate scheme for the passenger bus transport sector. With this in mind officials from the Department of Transport are engaging with officials from the Department of Finance to explore the possibility of replacing the scheme, where appropriate, by alternative non-tax financial support mechanisms to achieve the same policy objectives, subject to EU state aid requirements. I understand that in the interim the reduced rates applicable to fuel used for public transport services will be maintained.

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