Litre of petrol expected to rise by up to 7 cent

Petrol retailers have been urged to "act responsibly" by the Tánaiste, Ms Harney, as prices are expected to rise by between five and seven cent a litre across the State this morning.

Oil prices reached a 21-year high on international markets at the weekend. This resulted in a warning that there would be heavy losses in the road transport industry and rising inflation.

Ms Harney described the situation as very worrying. She said it had developed quickly and was due to external factors.

Although there were no price controls on the industry, she urged retailers and oil companies "to act responsibly about increases" and reminded them of their "obligation to act as quickly when the trend moves in the opposite direction".

The Irish Road Haulage Association (IRHA), the AA and SIPTU taxi-drivers have also expressed concern and called for a reduction in excise duty on fuel.

President of the IRHA Mr Eamonn Morrissey said members were pressing for action on the fuel crisis and were becoming increasingly frustrated at the Government, which was "taking over 50 per cent of the cost of a litre of fuel in taxes, yet doing little to ease the plight of motorists and hauliers".

Mr Morrissey said fuel accounts for a third of a transport operator's costs, and the association was seeking an urgent meeting with the Minister for Finance to reduce excise duty. The only other option was to issue supplementary bills to clients, and hauliers were worried this would lead to business losses.

The AA also called on the Minister for Finance to reduce the duty on diesel to help motorists but also as an anti-inflationary measure. "Nobody wants to see costs rising at this time and we in the AA warned at the last budget that the Minister was taking a gamble at the last budget when the Minister introduced a rise of about five cent a litre on fuel. It was a big own goal." Mr Faughnan said the increases would now be felt throughout the whole economy, and not just by hauliers, who were understandably "screaming blue murder" as they would be the first to experience the increases.

However, a spokesman for the Minister for Finance, Mr McCreevy, said there were no plans to reduce the duty on fuel.

He said any such move would require a formal amendment to the Finance Act and a vote in the Dáil. The spokesman also said the increases had been very sudden and it was a bit early for the Government to take any action.

Dublin taxi-drivers, members of SIPTU, have also appealed to the Minister for Transport, Mr Brennan, to take action on fares, which they can not unilaterally adjust to take account of higher petrol and diesel costs.

A spokesman for the Minister said fare regulation was still a matter for local authorities, pending the appointment of a taxi regulator.