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Pain at Irish gas pumps

Spiraling fuel costs in the Republic are causing a greater rift between Fine Gael and opposition parties, with a suggestion that prices be slashed described as the stuff of "economic dreamland."

All across Ireland, prices at petrol pumps are causing headaches for motorists. In the North, drivers are faced with some of the steepest prices in Europe, while in the Republic, costs are not far behind, with a liter of unleaded costing €1.65.

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Fianna Fáil has put forward a suggestion that a cut should be considered by the coalition government, prompting an angry reaction from Finance Minister Michael Noonan.

"Fianna Fail in government some years ago made an agreement in Europe that when there were spikes in the price of diesel and petrol, that governments would not react by making adjustments but over the cycle they would allow the prices to come down again," said Mr. Noonan.

"We're tied into commitments in Europe not to make temporary adjustments."

Meanwhile, in a bid to shine a light on the rising fuel costs, Fianna Fáil has proposed emergency Dáil legislation leading to a duty and value added tax cut that would amount to five cent per liter.

The party's transport spokesman, Timmy Dooley, insisted the measure would result in hard-pressed motorists having more disposable income to put back into the economy.

"A relatively small reduction in the price of oil we believe will be helpful," said Mr. Dooley.

"It will be self-financing because that money spent in the economy will be spent on elements that are more labor intensive and therefore give an opportunity to assist the economy through a relatively small stimulus but yet an important one."