Public under pressure as gas and oil prices rise again amid Ukraine crisis
Growing tensions around Ukraine, and the resulting European sanctions on Russia, look set to keep the squeeze on living standardss of Irish households. Picture: Niall Carson/PA
The fallout from the escalating tensions around Ukraine looks set to keep the squeeze on the living standards of Irish households, as the wholesale price of gas and crude oil rose again on Wednesday.
Analysts fear that a further escalation will lead to sanctions on gas and oil and foodstuffs such as wheat even though western Europe and Russia are mutually dependent on each other as a major customer and supplier of energy and food.
The price of wholesale European gas rose again in the session by over 10%.
The contract for gas for delivery in March traded at over €88 per megawatt hour, according to the London’s Intercontinental Exchange (ICE). For June, the contract was trading at €87.35, up 11% on the day, suggesting no let-up in inflation pressures.
Gas can account for around 40% of all the energy generated on the all-Ireland electricity grid.
Economists fear inflation will rise further if tensions over Ukraine don’t ease. Russia is a major exporter of both oil and gas, and along with Ukraine, supplies large quantities of wheat to world markets. The price of many commodities rose on Wednesday, with wheat up 1.75%, lumber up 2.4%, and coffee prices rising by 1.7%.
Household debt advocates said the Government will be forced to review and increase its help to households, well before October’s budget.
It announced only two weeks ago a €505m package to help households cope with soaring electricity and heating bills. The package included an increase to €200 in a household energy credit; a fuel allowance lump sum payment of €125; a 20% cut in transport fares from the end of April, and a cut in caps for school transport fees.
However, Paul Joyce, senior policy adviser at the Free Legal Advice Centres (Flac) said that “rolling reviews” of household bills will be required because the Ukraine crisis has further added to energy costs since February 10.
“It is a pretty sorry situation”, if the €505m package is supposed to remain unchanged until October, Mr Joyce said. He called for the setting up a NPHET-style agency for Government to monitor price increases across the board.
Tricia Keilthy, social policy development officer at St Vincent de Paul (SVP), said “more resources are more urgent than ever” for low-income households.
The SVP favours expanding fuel allowances and the discretionary funds for the most vulnerable households to target the resources for people most in need of the measures.
The price of wholesale gas has increased 10% since the Government announced its enhanced package on February 10, according to Irish Examiner calculations. The price of crude oil, which was trading at $98.30 a barrel on Wednesday, has risen 7.5% in the past two weeks.
