Denis Naughten (Roscommon-South Leitrim, Independent)

Commuters, small businesses, hauliers, farmers and families are now are being screwed by the rise in fuel prices for diesel, petrol and home heating oil. The cost of filling an average car is approximately €112, which is making life extremely difficult for a great number of people. The Government is making a windfall from price increases, as it takes in excess of one cent for every five cent increase in the fuel prices. At current rates the projection is that the Government will take in an extra €64 million in VAT because of the price increases. However, to date there has been an outright rejection by Government of any proposal to assist those who are struggling to put fuel in their car to get to work to pay for the septic tank charge, the household charge, the forthcoming water charges and the forthcoming property tax, never mind the small little issue of paying the mortgage on a house that is in negative equity.

I acknowledge that international influences have forced an increase in the price of fuel on a worldwide scale but the domestic price of fuel has now reached an unsustainable level for many families. In March 2012 fuel price inflation in the United States reduced by 4.3% yet in Ireland in the same period we have seen an increase in the price of fuel of 8.7%.

Crude oil prices are now at a much lower than they were in July 2008 but the cost of fuel in Ireland is much higher and the cost of keeping a car is climbing on a daily basis. In July 2008 when oil prices peaked, a litre of petrol here cost €1.36, which is 34 cent less than it costs today.

I am aware the Irish Road Haulage Association, has proposed a fuel rebate scheme for excise. I understand a working group has been established between the IRHA and the Department of Finance to discuss this matter and I hope the Minister can outline the progress in those talks to date.

We cannot ignore the fact that the price of petrol and diesel consists mainly of taxes levied by the Government, including excise, VAT and the carbon tax. That is in no small way facilitating the fuel laundering industry that we have seen develop here in recent years. There were a number of instances of fuel laundering in my constituency and in adjoining constituencies last year. That trend is continuing this year, with fuel laundering becoming a major factor and problem in the economy. It is taking money out of our economy, out of the Exchequer, and forcing the Government into a situation where further taxes have to be increased. That also needs to be addressed.

According to AA Ireland, the average motorist will require 150 litres of petrol per month which, at a rate of €1.70 per litre, costs each motorist €255. The bulk of this goes in Government taxes. In fact, it is €1,628 per annum in tax alone. We cannot ignore the impact this is having on the spending of individuals, the price of goods and the cost of doing business.

Higher fuel costs impose a greater financial burden on the poor relative to the rich. They are least able to afford the cost involved in a changeover to more energy efficient fuels. The bad news is that things are likely to get worse, with some forecasters predicting the cost of a litre of petrol could hit €2 by the end of the year, delivering a windfall in fuel tax revenue.

Rather than using the taxation system to run the economy into the ground, I am appealing to the Government to use the extra VAT generated from increasing fuel prices to reduce the overall cost of petrol and diesel. The Exchequer would be no worse off, but it would help struggling families and the economy.

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