The Government cannot shield every industry from rising fuel and energy costs, Taoiseach Micheál Martin warned on Friday, adding that it was doing its best to mitigate the cost burden.
Despite the introduction of a 20 cent and 15 cent cut in excise duties on diesel and petrol respectively, the cost of filling up one’s car, bus or tractor remains high, with significant price variations identified around the country.
Rising costs are linked to the US-Israeli attack on Iran, the blockade of the vital Strait of Hormuz and Iranian strikes on fuel production facilities in the Gulf.
Speaking in Limerick, the Taoiseach said: “The world is in conflict, and this war in the Middle East is having a huge impact on oil supply, but also on the cost of energy more generally, that’s what we’re witnessing now. No government in the world can compensate every sector or every individual for what is happening on the international markets as a result of the war.”
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“But what we can do is to try and ease the pressure on families, to target whatever relief we can give, and that’s what we are doing. And the package we announced this week is probably the largest package across Europe to be announced at this stage, and we’re only three weeks into this war.”
The Coalition has faced Opposition criticism for how it has targeted support so far. Sinn Féin claimed the Government had abandoned 750,000 households that rely on home-heating fuel.
On Wednesday, party leader Mary Lou McDonald said the Government’s measures would mean a 2 cent reduction per litre and “a lousy €20 off a fill of oil that has skyrocketed to around €1,700” .
The Economic and Social Research Institute (ESRI), an independent think tank, was also critical of the fuel duty cuts it described as a “subsidy to higher-income households”.
The ESRI and the Central Bank both warned of inflationary pressure if the Middle East conflict is prolonged. Availability of other products, including fertiliser, has been directly affected by the Straits of Hormuz, while higher fuel prices over a long period are expected to prompt price rises for many other products as input costs increase for producers.
Martin warned the Government does “not have certainty in terms of what could potentially unfold in the weeks ahead” and therefore it had to be “careful and cautious” about how much of a buffer it was prepared to offer people.
“We also have a budget next year,” he said. “We’ve got to invest in more services, education, health, children, right across the board. So, I think the Government got the balance right this week.
“We supported the fuel allowance to many working families who would benefit from that, but also hauliers, because hauliers will impact on the price of food on the shelves – the haulage industry is critical to trade, critical to our economy, and so we’re trying to target resources while also trying to give people more generally helping hand, and that’s why the excise duties have been reduced.”
