Taoiseach talks of inflation rate hitting a peak of 6.2%

The Taoiseach said that inflation could peak at 6.2 per cent.

Mr Ahern said the figure was based on prices not increasing in the domestic sector. "Two-thirds of the increase in the current rate derives from three areas - interest rate rises, fuel and cigarettes. On price inflation on the domestic side, there continues to be concern about prices in other categories, mainly from the sterling area.

"The supermarkets have argued that they have not passed on some of the price increases from the sterling area. For competitive reasons, I hope they do not do so."

Mr Ahern said that when the Government looked at the issues, childcare was considered to have a far greater impact, not in reducing the index, but on people. "As we said yesterday, there should not be any price increases in any area between now and the end of the year."

The Labour leader, Mr Ruairi Quinn, asked if the price control order on alcohol would apply to the entire drinking establishment of a public house, or be confined to what was traditionally known as the public bar. Mr Ahern said he assumed it would apply to the entire premises.

When Mr Ahern said he was amazed to see the differentials in some prices, Mr Quinn noted that "a pint of Bass would cost a mighty sum in certain parts of the country". The Taoiseach said a survey had revealed the price ranging from between £2.10 to £2.85, which was very serious.

He added that there was competition in petrol prices, but he did not believe there was much awareness of it. "There is a difference of £8 on a full tank."

Mr Donal Carey (FG, Clare) said there was at least a 10 per cent gap between petrol prices in urban and rural areas, which was impacting heavily and causing poverty in rural areas. It was mainly because there was no competition in the retail petrol sector in rural areas.

Mr Ahern said there were differentials, but the prices of the three main companies, which each held about 25 per cent of the market, varied across the State and were quite competitive. It seemed as if different locations were picked and the situation changed, but there was price competition.

He said surveys he had seen showed that drink prices in rural areas were far more competitive than in city areas. There were only 1,000 licensed premises for the 34 per cent of the population in the greater Dublin area.