Fergus O'Dowd (Louth, Fine Gael)
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Question 138: To ask the Tánaiste and Minister for Finance the status of the fuel excise duty refund for those in public transport services; if his promise to TDs in different political parties in late November 2007 that in the interim the reduced rates applicable to fuel used will be maintained, is still current policy or if he has since reversed that policy; and if he will make a statement on the matter. [13158/08]

Fergus O'Dowd (Louth, Fine Gael)
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Question 139: To ask the Tánaiste and Minister for Finance if he will report on promises made to TDs in late November 2007 that he would investigate alternative non-tax support mechanisms that could be put in place where appropriate to maintain the assistance currently being provided in response to the cancelling of the fuel excise duty rebate for those in public transport services; the steps he has taken to review alternatives; the measures he plans to introduce; and if he will make a statement on the matter. [13159/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I propose to take Questions Nos. 138 and 139 together.

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 is the deciding authority, refused such requests.

Consequently, as the Deputy may be aware, the Finance Act 2008 provides the legislative changes to withdraw the relief in respect of fuel used for public passenger transport vehicles. The relief will be withdrawn with effect from 1 November 2008 and the appropriate full excise rates will apply from that date. In the interim the reduced rates applicable to fuel used will be maintained.

However, the Department of Transport and other relevant line Departments, who have primary responsibility in this regard, are, in conjunction with my Department, continuing to explore alternative mechanisms that may be used to direct Exchequer resources toward such services from that date, subject of course to compatibility with competition and EU State Aid requirements. I understand that the Department of Transport is taking legal advice as regards the appropriateness of alternative forms of relief.