The Government will consider further supports for people hit by energy price rises, but the Taoiseach Micheál Martin has cautioned that people cannot be shielded from the full impact of the war in Ukraine.
And Minister for Energy Eamon Ryan warned that there could be further price rises to come.
Mr Martin was speaking at the Irish embassy in Washington DC after he chaired a Cabinet meeting online which approved supports for the haulage industry announced earlier this week.
But he faced questions about the Government’s response to energy price hikes announced this morning.
The average electricity bill and gas bill is to increase by 27 per cent and 39 per cent respectively from next month, Bord Gáis Energy confirmed on Tuesday.
The increases will add about €350 a year to the average household’s annual gas bill and €340 to the average annual electricity bill. It is the first price hike announcement from any energy supplier this year, and more suppliers are certain to follow.
Mr Martin said European Union leaders would be advised by the European Commission of potential further measures by next week, when the leaders hold a scheduled summit in Brussels.
“The war is having its impact,” Mr Martin said. “It’s a very tough impact on a lot of people, particularly people on low incomes. Bills have gone up enormously as a result of this.”
Mr Martin said EU governments “will have to work collectively across Europe to see how best we can shield our people from these impacts. We won’t be able to do it all but we’ll certainly continue to see how we can alleviate the pressures on people.”
The Taoiseach said Ireland has moved “faster and further than most other EU countries”, saying that about €800 million had been provided by the Government to ease the pressure caused by cost of living increases.
“It’s a new reality, a reality brought about by war in Europe,” Mr Martin said. He said that the sanctions – “the most severe sanctions ever taken against a country” – would also contribute to a shock to the economic system.
“We can’t shield the entire population from the entire impact of this war,” Mr Martin said. “We will do everything we can to protect those on lowest incomes and those under the most pressure. But what I’m simply saying is that the idea that we can produce a billion package every two weeks – there are limits to what Government can do.”
He said there would be “a bill coming” for expenditure on education, health and accommodation to pay for the costs of Ukrainian refugees “so we’ve got to allow for that”.
Mr Ryan said the crisis was “hitting home in energy now”, describing the rise in electricity and gas priced announced this morning as “really dramatic”.
Mr Ryan is also in Washington for a series of meetings with US politicians and officials, including the energy secretary Jennifer Granholm, whom he will meet later today.
On the price rises, Mr Ryan said, “We were aware of that coming . . . It’s going to cause real difficulties for us.”
He said the Government’s interventions “won’t cushion the full blow . . . we can’t cover the full costs” , but added the Government supports, including the €200 energy credit, would alleviate its impact.
Mr Ryan said the only long-term solution is to “to reduce our dependence on gas”.
He warned that as companies hedging arrangements came to end, there could be further increases in energy prices. Gas prices, he said, had increased six-fold in recent months.
“We can’t cover every single cost increase . . . the most important measure is to reduce our use of these fuels,” he said. “We have to work within the EU to see what else can be done.”
A spokesman for Tánaiste Leo Varadkar said he would convene a meeting of the Enterprise forum, organised under the auspices of his Department, on Wednesday to hear how the war in Ukraine is affecting businesses in terms of energy costs and disruption to supply chains. The forum includes bodies representing retail, food suppliers, manufacturers and the multinational sector.
Earlier, Sinn Féin welfare spokeswoman, Claire Kerrane called on the Government to take action in relation to energy costs, particularly home heating.
She said some of the reductions and payments that have been made – especially the lump sum payment announced on Monday – were welcome but she argued the Government needed to go further.
“We have asked for over a year now for a discretionary fund to be established, a discretionary fund of €15 million to assist those families and those households specifically who are locked out of the fuel allowance . . . We know, of course, that for those that work 30 hours or more any week, they cannot access the exceptional needs payment. This leaves workers and families and households with no assistance whatsoever in relation to home heating, and in particular home heating oil which the vast majority of people I represent and in the western northwest rely on to heat their homes.”
She said her party had brought forward a package of measures that would cost between €1 billion and € 1.4 billion, which would be covered largely by the €1.2 billion the party estimates the Government will take in extra revenues from VAT because of fuel increases.