Advocates for low-income households have urged the Government to revisit the €505m energy subsidy package it unveiled two weeks ago in light of the jump in fuel costs prompted by the Ukraine crisis.
On February 10, the Government announced a €505m package to help households cope with soaring electricity and heating bills. It included:
- A rise to €200 in a household energy credit;
- A fuel allowance lump sum payment of €125;
- A 20% cut in transport fares from the end of April;
- A cut in caps for school transport fees.
However, Free Legal Advice Centres (Flac) senior policy adviser Paul Joyce said rolling reviews of household bills would be required due to the impact of the Ukraine crisis on fuel prices.
“It is a pretty sorry situation”, if the €505m package is supposed to remain unchanged until October’s budget, Mr Joyce said.
He also called for the setting-up of a Nphet-style agency for the Government to monitor price increases across the board.
St Vincent de Paul social policy development officer Tricia Keilthy said it was more urgent than ever that resources be targeted at low-income households following the price rises.
The charity favours expanding fuel allowances and the discretionary funds to target the most vulnerable households, which are most in need of the measures.
The price of wholesale gas has increased 10% since the Government announced its enhanced package on February 10, according to Irish Examiner calculations. And the price of crude oil which was trading at $98.30 a barrel on Wednesday, has risen 7.5% over the same period.
Russia is a major exporter of oil and gas, and along with Ukraine, supplies large quantities of wheat to world markets. The price of many commodities rose on Wednesday, with wheat up 1.75%, lumber up 2.4%, and coffee prices rising by 1.7%.
The Central Bank has said rural, low-income, and older households are seeing larger cost-of-living increases due to higher inflation, largely due to rising energy costs.
Lower-income households have to spend more of their income on energy and food, and less on goods and services. While headline inflation was 5.7% for the average household in December, it was at 6.2% for rural households, the Central Bank said.
Meanwhile, consumer confidence has been eroded this month due to surging price inflation and concerns over the impact on energy costs from the escalating Russia-Ukraine crisis, a survey by KBC Bank shows.
The slide in consumer sentiment in February may not deliver the expected boost in consumer spending, yet still add to house price inflation, KBC said.
More than a quarter of consumers said they already have spent their savings, while 17% are holding on for a rainy-day emergency, the survey found.