Taoiseach signals upward trend for energy and food prices

Taoiseach Micheál Martin has said there is going to be “ongoing impacts” from the war in Ukraine “over and above what we have experienced” in terms of energy and food prices.

Mr Martin said price increases on energy and food would continue until the end of the year and that the Government could not bring in separate measures to help households “every single week”.

Speaking during Leader’s Questions in the Dáil on Tuesday, Mr Martin said the Republic had sought a derogation from European Commission rules so that VAT can be lowered on fuels.

He was responding to Sinn Féin leader Mary Lou McDonald who said workers and families face a cost of living crisis that “demands an urgent response”.

Ms McDonald said last week Energia was the third energy supplier this year to announce a price increase, while there were 35 energy price hikes in 2020.

“Without action, low- and middle-income households face an income squeeze that they will struggle to withstand and indeed many are already unable to cope,” she said.

Mr Martin said there was “no doubt” a very severe increase had occurred in the cost of living over the last number of months, and particularly as the State emerged from the Covid-19 pandemic.

Impact of war

He said the war in Ukraine was “significantly adding and making far worse” the inflationary pressures on the economy, particularly on households, with energy, food and other commodities affected.

“At the moment Russia and Ukraine account for about 30 per cent of global exports of wheat, 7 per cent of maize and more than 50 per cent of sunflower seed oil,” said Mr Martin.

“Together they produce 12 per cent of calories consumed globally and Ukraine supplies about a quarter of the European Union cereal and vegetable oil imports. So there’s going to be ongoing impacts from this war over and above what we’ve already witnessed to date.”

Mr Martin said existing transport routes had been disrupted because of the war and the cost of trade would increase.

He described price increases as “dramatic” and “phenomenal” and that the Government had provided close to €2 billion in income supports and targeted measures since the last budget.

Mr Martin said the Government couldn’t bring in separate measures and that they had to plan and prepare for the medium term.

Ms McDonald called for VAT to be removed on fuels for a “defined period” as well as the removal of excise duty from home heating oil.

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