Joe McHugh (Donegal North East, Fine Gael)
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Question 282: To ask the Minister for Transport the changes being proposed to remove the fuel rebate for buses operating in peripheral areas (details supplied) in County Donegal; and the plans in place to ensure the fuel rebate will remain as a vital commitment by the Government to rural transportation provision. [29387/07]

Noel Dempsey (Meath West, Fianna Fail)
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I refer the Deputy to the Minister for Finance's reply to Dail Questions Nos. 106 and 107 which he answered on Wednesday last 14th November in which he stated:

Bobby Aylward (Carlow-Kilkenny, Fianna Fail)
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Question 106: To ask the Tánaiste and Minister for Finance if he will meet with members of the private transport sector to discuss alternative measures which will alleviate the serious impact the loss of the fuel excise rebate will have on their industry in view of the fact that they were not informed of this situation until very recently; and if he will make a statement on the matter. [28833/07]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 107: To ask the Tánaiste and Minister for Finance if he will review the recommendation that has been made regarding the removal of the refund of excise duty on fuel used in passenger transport services in view of the fact that private bus operators were not made aware of this imminent decision until recently and the consequences that the matter will have for 2008 contracts with schools and tours; and if he will make a statement on the matter. [28866/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 106 and 107 together.

The Deputies may recall that I have answered Parliamentary Questions on this issue over the past year, including on 4 July 2007. The 2003 EU Energy Tax Directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of Member States. In the Irish context, these derogations allowed for reduced rates to apply to fuel used for public transport services which includes school transport services.

While these derogations expired on 31 December 2006, Ireland, along with other Member States, sought retention of its derogations beyond that date. However the European Commission, who are the deciding authority, have to date refused all such requests. The Commission maintain 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 that any further favourable excise treatment is not allowable. In this regard the Commission's decision was published to its website in March 2007. At the Commission's behest my officials have indicated that Ireland will avail of the forthcoming Finance Bill to make the necessary legislative changes to conform with the Directive.

In the circumstances, the relevant line Departments who have primary responsibility in this regard are, in conjunction with my Department, exploring alternative non-tax support mechanisms that could be put in place where appropriate to maintain the assistance currently being provided, subject of course to compatibility with EU State Aid requirements. In the interim the reduced rates applicable to fuel used will be maintained.