State action urged on rising fuel prices

The Government must act immediately to mitigate the effects of rising fuel prices on families and businesses, Opposition spokesmen and the haulage industry said yesterday.

Measures suggested by Fine Gael and Labour included an increase in social welfare fuel allowances and the scrapping of the special 1 per cent levy on petrol and diesel.

The Irish Road Haulage Association has also suggested changes to allow excise rebates for licensed hauliers. Pointing out that petrol and diesel prices have risen by 27 per cent in the Dublin area over the past 12 months, Fine Gael spokesman Phil Hogan called on the Government to scrap the 1 per cent Vat increase which was levied on petrol and diesel two years ago.

He also revealed the results of a Fine Gael survey of petrol retailers in Dublin which showed that the cheapest of the 11 garages surveyed for unleaded petrol was Esso on the Finglas Road, which was charging 103.9 cent per litre.

The cheapest garages for diesel were also on the Finglas Road, with the Esso, Tesco and Shell garages all charging 101.9 cent per litre.

The most expensive petrol retailer of the 11 surveyed was Statoil on Usher's Quay, which was charging 107.9 cent. This retailer was also charging the highest price for diesel, also at 107.9 cent.

Mr Hogan said the soaring cost of petrol was having a massive impact on motorists, and manufacturers and hauliers were going to the wall.

"The Government must use the next budget to lower Vat on fuel by 1 per cent."

The Irish Road Haulage Association revealed it had recently lobbied Minister for Finance Brian Cowen on allowing excise rebates for licensed hauliers. It said it was "time to distinguish between recreational use of fuel and fuel as essentially a raw material".

The association wants holders of tax-clearance certificates to be allowed to claim back the excise duty, and has advised the Minister that the move would allow him to scrap the current "washed" diesel scheme which provides cheaper diesel for agricultural vehicles.

"It would also have the benefit of encouraging hauliers to become tax compliant to avail of the scheme, and it would be easier to administer than the current practice of washing diesel and selling it for agricultural use which is a scheme which has to be policed," said association spokesman Jimmy Quinn.

He also said the Government should take the opportunities offered by biofuel more seriously and develop the industry.

Biofuel, which is made from plant oils, is an economic alternative to fossil fuels and is more environmentally friendly.

Labour Party spokesman on social and family affairs, Willie Penrose, called on the Government to agree a substantial increase in the fuel allowance paid to social welfare recipients in the light of price increases.

He said there was an urgent need for change, which should be made before winter.

The National Fuel Scheme is intended to assist those dependent on long-term social welfare to meet their heating costs, and it currently paid to more than 250,000 households. It is paid from October to mid-April each year, and is worth €9 per week.

"It is particularly important for pensioners to assist in combating hypothermia or other cold-related illnesses," said Mr Penrose. "There has not been an increase since the beginning of 2002. In the meantime the price of many fuels has gone through the roof."