Ireland faces potentially “dramatic” increases in food and energy prices as a result of the ongoing war in the Gulf, Minister of State for European Affairs Thomas Byrne warned Sunday. The Government is considering potential supports for those affected, with an initial assessment expected “over the next week or so,” though Coalition sources have cautioned against expecting swift action.
Speaking on RTÉ’s The Week in Politics, Byrne acknowledged an “unprecedented global situation” and indicated the possibility of government intervention to address the rising cost of living. However, several sources within the Coalition have downplayed the likelihood of a rapid assessment or the immediate implementation of support packages. The prevailing sentiment suggests a wait-and-see approach, with a growing recognition that the duration of the conflict will dictate the urgency of a response.
Even as widespread energy credits, similar to those deployed following Russia’s 2022 invasion of Ukraine, are not currently under consideration, extending the fuel allowance season is being discussed as a potential measure. Any support package, a Cabinet Minister stated, would prioritize vulnerable populations. Byrne also dismissed the possibility of a VAT cut, arguing it would not directly benefit those struggling with increased costs and confirmed that planned increases to the carbon tax will proceed to fund the fuel allowance and retrofit programs.
“Clearly prices have gone up. They may well go up dramatically again, and it won’t just be fuel and electricity, it could be food supplies, etc,” Byrne said. The Government has directed the Competition and Consumer Protection Commission to investigate the retail fuel sector for potential anticompetitive practices and allegations of “price gouging,” though retailers have refuted these claims, attributing price increases to surging wholesale costs.
A senior Coalition source emphasized the need for careful consideration, warning that interventions could exacerbate inflationary pressures. Concerns were also raised regarding potential constraints imposed by EU fiscal rules, which may require a “brake” from Brussels if substantial supports are agreed upon. These issues are expected to be discussed today in Brussels, where Minister for Finance Simon Harris will meet with his euro zone counterparts, and later this week with EU finance ministers.
The Government’s weekly meeting is scheduled for Monday, coinciding with the commencement of ministerial St Patrick’s Day travel. Separately, Minister for Public Expenditure Jack Chambers will seek approval to repeal emergency legislation enacted during the 2008-2015 financial crisis that reduced public service pay and pensions. The proposed legislation aims to transition public sector pay away from emergency measures and towards a standard legal framework. Minister for Agriculture Martin Heydon will present a memo on forestry, based on work conducted by junior minister Michael Healy-Rae, detailing a midterm review of the 2023-2027 forestry programme, which reported 2,527 hectares of recent forests planted last year and proposed amendments to existing schemes to improve performance.
