Shane Ross (Independent)

I wish to speak about the need for the Tánaiste and Minister for Enterprise, Trade and Employment to outline the Government's plans to curtail the increase in the price of diesel fuel in light of the knock-on effect on the consumer price index. I just met a businessman whose business has a small turnover of approximately €10 million per annum. He told me that the increase in fuel prices, and diesel in particular, is going to increase his costs by €200,000.

The extraordinary aspect of the increase in diesel prices is that nobody seems to know why it is happening. No credible explanation has been given but it appears it is due in part to speculation in world commodity markets and is related to the increase in oil prices. While it is difficult therefore for the Tánaiste to provide a solution, the first thing we should require is an explanation for why the price of diesel, which has traditionally been cheaper, is increasing at a much faster rate than ordinary fuel. I hope this is not because the tax incentives which will be introduced at the end of June to make people switch to diesel vehicles are being exploited by profiteers. It may be that unscrupulous dealers are profiting unnecessarily from efforts to make the area more environmentally friendly.

Hauliers are among the people most affected and the Minister of State will be aware that they are up in arms about the increases. They need relief or, at least, to be pointed in the right direction because they will get into serious trouble if the price of diesel continues to rise at this rate.

When I checked this afternoon, the average price of a litre of petrol was up 6% to €1.30 in May, while the average price of diesel was €1.42. This increase is causing a great deal of concern not only to the individuals affected but also to the Consumers' Association of Ireland.

Diesel cars currently represent 27% of overall sales but this proportion is expected to increase to 50% in 2009 with the implementation of the tax incentives. If the price of diesel remains higher, people will have been misled, to say the least, into believing that switching to an environmentally friendly vehicle would be cheaper. It will be more expensive and the incentives will backfire. I ask the Minister of State to investigate this matter as well as to look more generally at the behaviour of Topaz and others. I am not saying they are doing anything wrong but they appear to be buying up an enormous number of garages, thereby putting them in a dominant position. That will certainly not reduce the price of fuel.

Speculation may be the cause of this damage. I deplore the fact that we do not know why diesel prices are increasing so much more quickly than petrol and I ask the Minister of State to outline the Government's plans to counter this trend. It has serious implications for the economy at a time when the consumer price index is increasing at an alarming rate and when everybody in the country is being hit by food prices. Energy prices are set to rocket and the unknown factors operating within the fuel market threaten us during this period of economic vulnerability.