Finance Minister Michael Noonan has accused Fianna Fail of living in "economic dreamland" for proposing a cut in fuel prices.
He said the Government has to stick to its budgetary commitments and accused the opposition party of hypocrisy, pointing out that it refused to tackle the issue when in power.
"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."
Fianna Fail will propose emergency legislation in the Dail on Tuesday, appealing for a 4 cent-per-litre cut in excise duty and a further 1 cent-per-litre cut in VAT.
Transport spokesman Timmy Dooley insisted the party's suggested 5 cent-per-litre reduction 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 labour intensive and therefore give an opportunity to assist the economy through a relatively small stimulus but yet an important one."
A litre of petrol currently costs around 1.65 euro and diesel around 1.56 euro. Mr Dooley said this represents a 75% hike in forecourt prices from 2009.
The Co Clare TD argued that Finance Minister Noonan himself had previously claimed that any savings the public makes as a result of tax reductions would eventually go back into the state.
He also pointed out that in 2008 Enda Kenny criticised then Taoiseach Brian Cowen for having no plans to tackle the rising cost of fuel.