The council of the Irish Road Haulage Association is to hold an emergency meeting this morning to consider its response to the refusal of the Minister for Finance, Mr McCreevy, to reduce excise duty on diesel in advance of the December Budget.

The president of the IRHA, Mr Gerry McMahon, warned that the Minister did not appear to be taking the situation as seriously as his membership would expect.

He said that price increases in diesel over the past 18 months had brought the association to the point where diesel now accounted for 35 per cent of haulage costs. He warned that firms could close and said jobs would be lost if the situation was not addressed before December.

The Chartered Institute of Transport, the Small Firms' Association, IBEC and SIPTU issued statements broadly sympathetic to the drivers' case, but urged caution before any disruptive action was considered.

The IRHA warned that it could not rule out taking its protest to the streets if the Minister "failed to see the seriousness of the situation".

Warning of the effects of a blockade of the ports or any other disruptive action by hauliers, Mr Philip Mahony, the chief executive of the CIT, said that the business community and travelling public had not yet recovered from the rail strike. Any ongoing action by hauliers which would further disrupt the State's commercial activities and cause even more damage to the transport industry's image had to be avoided, he said.

Mr Pat Delaney, of the Small Firms' Association, said the concern was that fuel price increases would be passed on to the consumer, thereby increasing inflation. While acknowledging that the hauliers' complaints appeared to be "falling on deaf ears", he said that they would be "shooting themselves in the foot" if they were to take their protest to the streets.

Meanwhile, the Irish Congress of Trade Unions and the leader of the State's largest union have both warned the Government that people should not have to adopt French tactics to get action on oil prices and transport costs.

In a statement on tax reform, the SIPTU president, Mr Des Geraghty, said that the Minister for Finance should think twice before ignoring trade union demands to reduce the impact of inflation on the living standards of ordinary people. "I hope the Minister is paying close attention to events in France so that he can fully appreciate the consequences of inexcusable delays in taking effective action to reduce domestic fuel and petrol prices."

An ICTU spokesman, Mr Oliver Donohue, said that a call for reduced excise duty on oil and for increased subsidies to public transport had been made by Congress as long ago as last May.

"People should not have to do the same thing here [as in France] to get an adequate response", Mr Donohue said. "The Government has had plenty of notice and it is a simple set of measures to take. It has also been top of the agenda at every meeting we have had with the Government since May.

"The Government seems to be responding to hauliers' demands, but they should have responded to us earlier."

Subsidies should be increased for public transport, so that fares could be reduced, and the price of petrol at the pump should be reduced as well. "Taxes on petrol and fuel oils are way above what EU tax harmonisation rules require", Mr Donohue added.

On taxation, Mr Geraghty said: "There will be no second chances for the next Budget. If the Government fails to deliver fully on the commitments in the Programme for Prosperity and Fairness, then it will, by its own actions, scupper the programme. Irish workers are no longer prepared to accept the live-horse-and-you'll-get-oats approach to economic and social justice in this country."

Responding to remarks made by the Taoiseach in New York on tax cuts, Mr Geraghty said: "I hope that the Taoiseach means what he says when he talks about the priority to be given to the lower-paid in the coming Budget. The Government should be under no illusion that this priority not only includes giving full delivery to commitments made under the present programme. It should also include the further step of front-loading those commitments for lower-paid and average-paid workers in order to compensate for the fact that inflation is now running at more than twice the rate expected in the programme negotiations."