In the midst of the business pertaining to the Lisbon treaty, to which I shall return later, I wish to bring again to the notice of the Taoiseach an issue of real concern for hundreds of thousands of people, namely, the cost of fuel prices. Fishermen, commuters, small business, farmers and everyone else now are being screwed by the rise in fuel prices for diesel and petrol. This is a real burden on everyone. The cost of filling an average car is approximately €100, which is making life extremely difficult for a great number of people. Members have seen evidence of the frustration felt by fishermen, hauliers, commuters on a daily basis, small businesses, farmers and so on. Does the Taoiseach accept the Government is taking a real windfall from price increases, as it takes one cent for every increase of five cents? What relief measures does the Government propose to implement to assist in the burden that commuters, small businesses, hauliers, fisherman, farmers and everyone else in the community now face?

I explained the last time the Deputy raised this matter that the Exchequer yield from excise, as excise is set at a nominal amount, does not increase as the price of fuels increase. On the other hand, the yield from VAT, which is set as a percentage of the price, increases as the price of fuels increase. As Members will be aware, VAT receipts are falling and in a situation in which tax revenue is tightening, the Government cannot cut tax in any area without jeopardising funding for essential services. It also should be borne in mind that to the extent that spending in the economy is reallocated to petrol, diesel and other oil products and away from other VAT-liable spending, and to the extent that the overall level of economic activity is reduced by higher oil prices, there will be little or no net gain to the Exchequer.

I also must point out that businesses are entitled to reclaim VAT incurred on their business inputs, including VAT incurred on fuel. VAT incurred on auto diesel, for example, on marked gas fuel used in the course of business, is a deductible credit for business in the VAT system. According to recent EU data, Ireland has the ninth lowest petrol prices and the 12th lowest auto diesel prices of the 27 EU member states. It is mainly the newest member states that have lower fuel prices than Ireland.

At their meeting earlier this month, EU Finance Ministers discussed the difficulties created by high oil prices. They confirmed the agreement reached in Manchester some years ago that distortionary fiscal and other policy interventions should be avoided. The fact is that reducing taxes on fuels would send the wrong signal both to consumers and oil producers. We have to be careful not to exacerbate what is an already difficult situation.

Any measures taken will have to be targeted. Ministers met for over nine hours on the fishing industry. We will examine what is an EU wide problem at the next meeting of the Council of Ministers.

That does not answer my question. What relief measures will the Government put in place to assist people who are now really feeling the pinch? I listened to a fisherman from Kilmore Quay talking about his €18,000 diesel bill for five days steaming, even though there may have been no fish at the end of it. I spoke to a haulier in Cork who drove his lorry north of the Border and back, which took up 600 litres of fuel. These costs are sometimes passed onto consumers, but commuters every day are now faced with rising prices at petrol and diesel pumps. With price increases across the board, this is eating into disposable income at the end of the week.

Does the Taoiseach agree with the projections that the Government will take in an extra €64 million in VAT because of the price increases? Does the Government have any proposals to assist with the tax burden that is currently imposed on drivers? This is a serious issue for hundreds of thousands of commuters on a daily basis, and the Government needs to do something about it. They know the Government is taking in €64 million extra in VAT and they want to know if it can bring in any measures to alleviate the financial pressures being imposed on them.

I am sorry but again I must point out that the VAT intake has been reduced, so I do not know where he is getting the idea that the Exchequer has seen an increase. Overall economic activity has decreased because of the higher oil price, therefore the Exchequer take on VAT has decreased as well. That issue was raised by a Fine Gael spokesperson in a press statement last week.

How can there be a reduction in fuel?

There was €64 million extra in VAT.

The fact is that oil prices are higher due to rising commodity prices in general. If we use the taxation system as a means of assistance, we will provide benefit to the producers and not to the consumers. The benefit will go to those who are already getting a higher price for their product. The Deputy is making the point that there is a windfall available to the Government, but that is not the case. The overall reason for that is very simple. If people have a set disposable income, while they must pay more of that on petrol than before, they still have only the same income to spend. The fact that more of it is being spent on petrol does not mean that there is a windfall available to the Government, as the overall consumer spend is the same. A greater amount is spent on petrol and that is what is causing hardship in certain sectors. That is why there has been a meeting between Ministers and their representative bodies.

That works both ways.

It does not both ways. It works the only way it can. One cannot double count. One can only count once. The fact is that a greater percentage of consumer spend goes to those areas which have higher prices, but on the basis of fixed incomes, the same amount of money is collected by the Government. Due to the higher oil prices, the reduction in economic growth rates means that the overall Exchequer take is down on those headings, as was pointed out by the finance spokesperson for Fine Gael when the figures came out last week.

Saudi Arabia will be increasing its output in order to reduce the price of oil. The Government should pass that on to the consumer here.