Road Hauliers have said their businesses will fail if the Government introduces a policy of fuel price equalisation between petrol and diesel in the budget.
Environmental groups want the Government to raise the price of diesel to at least the same level as petrol to counter climate impacts and human health products.
A report from the ESRI published last February concluded that an increase in excise duty on diesel fuel can be justified on both fiscal and environmental grounds.
It said the Government would raise more than half a billion euro per year, while significantly reducing carbon emissions and air pollution from the transport sector, if it raised the excise duty on diesel to the level currently charged on petrol.
But addressing the Budgetary Oversight Committee, the Irish Road Haulage Association said such a measure would be counterproductive, as it would result in haulage businesses closing down.
The organisation's president Verona Murphy said fuel price equalisation "would do nothing for environmental sustainability of our national road haulage fleet other than to take trucks off the road as haulage businesses fail due to excessive fuel costs".
"Fuel price equalisation between diesel and petrol will not produce any positive environmental benefits from the national road haulage fleet, but will inflict grievous financial damage to a sector already facing huge costs and massive uncertainty".
She said "rather than demonising diesel engines in an unthinkable and fad driven fashion" the ESRI and environmental groups should be encouraging fleet renewal and fleet retrofitting.
