‘We need to do more’: Ryan promises new proposals on cost of living

Proposals around time-of-day-pricing, fuel allowance and ‘helping families with children’

The Government is considering mandatory time-of-day-pricing for electricity as part of a second round of measures to respond to the pressure on consumers from soaring prices.

Minister for the Environment Eamon Ryan told the Dáil on Thursday that “we’re going to have to do a whole variety of additional measures” beyond the estimated €2 billion already committed, which included a temporary excise cut and an energy rebate.

A combination of factors, including the war in Ukraine, has pushed inflation in the State to 20-year highs with fuel and energy prices soaring.

The Taoiseach warned that people will have to adjust to higher fuel prices for some time.


Mr Martin said among the new measures under consideration to alleviate cost-of-living pressures were an expansion of the eligibility criteria for the fuel allowance and a move to give families with children “extra help”.

Mr Martin said higher energy costs were here for the “longer haul” and cost-of-living pressures were now a long-term challenge.

He said the Government’s focus was to target resources to assist the people and sectors hardest hit.

But the Taoiseach added: “I do need to be honest with people as well and say we [the Government] cannot fully compensate for the extraordinary inflationary environment we’re facing.”

Speaking about the same issue, Minister for Public Expenditure Michael McGrath said the Government planned to outline new measures on fuel costs in April.

“We have been seeking increased flexibility in relation to the application of VAT on energy costs. And some progress has been made,” he said, referring to an application made to European Commission.

The Government is waiting for a decision on whether a temporary VAT reduction on fuels can take place without Ireland losing a derogation from the 1990s which sees a 13.5 per cent rate applied.

Under existing EU rules, if VAT on fuel were cut temporarily, the rate reverts to 23 per cent rather than 13.5 per cent, once the temporary cut expires.

“In the short term the focus is on seeing exactly what flexibility is open to us in relation to VAT directive and the energy tax directive that is ongoing but we do expect it to come to a conclusion reasonably soon,” Mr McGrath said.

However, he ruled out suspending planned increases to the carbon tax.

Growing financial pressure

The Government has faced mounting political pressure in recent weeks to expand its response to the growing financial pressure on households.

On Wednesday, Electric Ireland became the latest energy company to announce a price increase that will hit hundreds of thousands of customers across the island. It comes in the wake of similar moves by Bord Gáis Energy and Energia.

Electric Ireland said electricity prices will rise 23 per cent and gas prices by 25 per cent– adding on average €300 and €220 to annual electric and gas bills for their customers.

Mr Ryan told the Dáil said the Government “will come forward in the coming weeks with a number of other measures such as that that to try and help address this real crisis we have”.

He said the Government could not pay for every response to cost-of-living increases and market mechanisms, including time-of-day pricing, needed to be looked at.

Time-of-day pricing is where the price of electricity is less expensive at night than during the daytime due to lower demand. It aims to encourage people to change their energy use to periods where costs are lower.

“I think one that could be really effective is to give time-of-day-pricing, make that mandatory. It’s just one example,” Mr Ryan said.

But, he conceded, “what we’ve done so far is not going to be enough. We’re going to need to do more”.

Mr Ryan also said he will meet with energy providers again and ask them to consider putting all customers on the beneficial introductory rate that new customers receive.

Mr Ryan also said he has asked the Commission for the Regulation of Utilities (CRU) for proposals to ease the pressure from rising energy bills.

Jack Horgan-Jones

Jack Horgan-Jones

Jack Horgan-Jones is a Political Correspondent with The Irish Times

Pat Leahy

Pat Leahy

Pat Leahy is Political Editor of The Irish Times

Cormac McQuinn

Cormac McQuinn

Cormac McQuinn is a Political Correspondent at The Irish Times