Contribution to the Motor Emergency Debate – 25th April 2012

April 27th, 2012 - Pat Breen

Deputy Pat Breen: Like my colleagues, I welcome the opportunity to contribute on this motion. Deputy Dooley and I live in County Clare and we know the cost of filling a car with fuel to travel to Dublin or around our constituency. Undoubtedly, the price of diesel and petrol has rocketed recently, but Fianna Fáil’s sudden concern for the hard-pressed motorist rings hollow, given the previous Government’s rejection of any move to intervene to reduce fuel prices. The former Taoiseach, Mr. Brian Cowen, stated that any intervention would incentivise fuel producers to constrain production levels further, thus leading the Government to subsidise fuel at existing market prices in the long term. Tonight’s business is disingenuous of Fianna Fáil. Perhaps it is a new look Fianna Fáil that wants to forget its past, but it cannot forget what it did in government.

Last night, the Minister of State, Deputy Perry, told the House that this proposal would cost the Exchequer €178 million in a full year and €119 million this year when VAT was taken into account. Deputy Dooley is genuine on this issue, but how would Fianna Fáil make up this shortfall? The lost revenue must be taken into consideration. We would all love to be in a position to reduce the cost of petrol and diesel by 4 cent, but the Government has a responsibility and cannot support short-term populist measures. We are living in unprecedented economic circumstances and we must be fiscally responsible. A cost realisation analysis of every tax-reducing proposal must be undertaken. The Exchequer cannot afford to lose revenue.

In my capacity as Chairman of the Committee on Foreign Affairs and Trade, I occasionally travel to some European countries. While in their capital cities, I observe the prices of fuel. Ireland is no cheaper or dearer than any other country. Indeed, some European countries are more expensive. This is a global problem. According to the AA, price increases since the beginning of the year mean that filling a 50-litre tank across the Border costs £72, more than the estimated £70 that two-children families there spend on groceries every week. According to the AA, the average family in the South spends more than €250 per month on fuelling a car. Petrol prices are soaring across the world. Recently, US President Obama stated that the problem could not be resolved by drilling his country’s way out of it and that the only realistic long-term solution was to reduce dependence on imported fossil fuels.

The cost of fuel has been driven upwards by a number of factors. Many experts believe that out-of-control energy speculation has doubled the price of crude oil. The market fundamentals of supply and demand have also come into play. In recent years, expanding economies have created a significant demand for oil. Supply has become scarce due to a number of conflicts around the world that have interfered with the price of oil. All of these issues must be taken into account.

The Government is aware of the impact of rising fuel prices on families and businesses. I have regular contact with the Irish Road Haulage Association, IRHA, the president of which, Mr. Eoin Gavin, comes from my county. The Minister for Finance has responded to the IRHA’s concerns by establishing a working group, comprising departmental officials and IRHA officials, to develop a working solution.
One of the main issues we face is oil’s uncertain future. It is estimated that 12% of diesel used in Ireland is illegal. Given our problems with the theft, smuggling and dilution of oil, we must consider other means of reducing the cost of fossil fuels.

The Opposition’s proposal smacks of nothing more than political opportunism. The Government has a job to do and it would be far more constructive of the Opposition to engage in providing more realistic solutions to these problems instead of shadow boxing.