Michael Noonan (Limerick City, Fine Gael)

We cannot consistently spend more than we collect in revenue each year. It is not sustainable. It was suggested by some Opposition speakers yesterday evening that the Bill would provide a modest reduction in the price of fuel. The impact of this reduction would be far from modest in terms of the cost to the Exchequer as it is estimated at €178 million in a full year when VAT is taken into account. The loss of revenue would have a negative impact on the performance of our public finances, which is vital for economic well-being and to exiting the EU-IMF programme. Ireland has been running large public finance deficits since 2008 and this has driven up the country's debt level significantly.

I acknowledge that fuel prices are very high and I do not underestimate the significant additional financial burden this imposes on families and businesses. Ireland, as with other countries, has experienced a significant increase in the cost of petrol and auto diesel in recent years. There is general acceptance the increase in fuel prices is an international phenomenon. All sides of the debate have acknowledged that fuel prices are driven by factors largely outside our control, including the price of oil on international markets, exchange rates, production costs and refining costs. The rise in oil prices over recent periods reflects additional factors such as geopolitical uncertainty in north Africa and the Middle East, with potential supply disruptions.

Many of the contributors to this debate have raised the issue of fuel laundering and its impact on legitimate business, Exchequer tax returns and the environment. The Government will not tolerate such criminality. In addition to the ongoing enforcement action, legislative changes to enable more effective controls in this sector have been included in this year's Finance Act, including the introduction of new licensing requirements for marked fuel traders. The new arrangements will, for the first time, require any person dealing in marked fuel to hold a licence for the purpose. The granting of a licence will be subject to tax clearance requirements and the applicant will have to show Revenue that any conditions subject to which the licence may be granted will be complied with. Revenue will be empowered to revoke a licence if any of the licence conditions are breached. In other words, there will be traceability. At present, those supplying home fuel are not licensed and the sector is the source of laundered fuel. By making the sector traceable, so that every gallon can be traced from the port of import to the customer, we will contribute to cleaning up the system.

It is intended that the record keeping requirement will be strengthened, and that a new requirement to make periodic returns to Revenue will be introduced. All mineral oil traders, including traders in marked fuels, will have to make regular returns, electronically, detailing their fuel transactions. This will be an important new source of information on the supply chain for Revenue.

Steps are being taken, in close co-operation with the UK authorities, to acquire a more effective fuel marker. Revenue is planning to go to the market shortly, with the UK authorities, to seek a new marker. With cross-Border trade, there is no point in acting unilaterally; we must act with the British Government on this point. A good deal of preparatory research has been undertaken here and in the UK and we expect to proceed with the project shortly.

In the course of the debate Members from both sides of the House have referred to the particular difficulties encountered by the haulage sector. I appreciate the difficulties and a working group has been set up between officials from Revenue and from my Department. The group met this morning and has a few more meetings to hold. I hope a policy paper will be prepared with a view to some action being taken.

I remind the House that Fianna Fáil Ministers, in 2005 and 2008, subscribed to the Manchester protocol, an ECOFIN protocol providing that when there are spikes in fuel prices, no European Government will intervene to reduce prices for competitive reasons. That position has been held largely since then. We are bound by an agreement into which the Fianna Fáil Ministers entered in 2005 and reiterated in 2008. Just after Christmas, it was reiterated at an ECOFIN meeting I attended. We are somewhat tied but we may be able do something because I appreciate the difficulties for the haulage industry. It is crucial to our model of export-led growth because the people who haul goods to the ports or haul them across the Continent play a vital role in lifting the Irish economy.

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