Pat Breen (Clare, Fine Gael)
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Question 171: To ask the Minister for Finance his views on the high cost of oil and the effect that this continuing hike in prices is having on the economy here; his views on whether the application of the improved rate of exchange namely the differential between the US Dollar and the Euro is being passed on to the Irish consumer; and if he will make a statement on the matter. [22080/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The rise in the price of oil mainly reflects stronger demand from emerging countries where living standards are rising.

The spot price of oil has traded at around $125 per barrel in recent weeks, although it has traded above that level at times. This is roughly double the level this time last year. From the perspective of the Irish consumer, this increase has been mitigated somewhat by the appreciation of the euro against the dollar. In euro terms the price of a barrel of oil is currently around €82, compared to approximately €48 this time last year. Higher oil prices restrain economic growth by dampening purchasing power, reducing profitability and lowering growth in our major trading partners.

Higher oil prices are clearly beyond our control. In this context, it is vital that we do not try to compensate ourselves for these increases. To do so would result in a further loss in competitiveness