Tom Hayes (Tipperary South, Fine Gael)
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Question 109: To ask the Minister for Finance the measures organised as the promised alternative to the fuel rebate for bus operators which his Department was investigating; if the increased cost of diesel and petrol have been taken into account when considering this issue; and if he will make a statement on the matter. [27986/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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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 inter alia 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. The Finance Act 2008, as the Deputies are aware, consequently provided 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 The relief will be withdrawn with effect from 1 November 2008 and the appropriate full excise rates will apply from that date.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 circumstances outlined above the question of reconsidering or deferring the withdrawal of the existing relief does not therefore arise. The Department of Transport and other relevant line Departments have, in conjunction with my Department, explored alternative mechanisms that might be used to direct Exchequer resources toward such services from that date, subject of course to compatibility with competition and EU State Aid requirements. While the matter is still being considered it is necessary however to stress, despite the claims being made otherwise, that introducing an alternative suitable mechanism is not a straightforward matter.