Govt bids to soften blow of energy price hike

The Government has moved to cushion the impact of today’s 17.5% ESB price increase on low-income families.

The latest electricity hike, blamed on the soaring energy market, will add up to €30 to the average two-monthly bill.

However, Social and Family Affairs Minister Mary Hanafin today announced a 16% increase in the fuel allowance to bring it to €540 per annum.

Bord Gáis is due to increase gas bills by 20% on September 1.

Ms Hanafin said: “Any increase in fuel affects everyone right across society, increasing both households and business costs. My priority is to ensure that those who most need help with rising energy costs get that support from the Government.”

Some 358,000 pensioner and other households qualify for electricity and gas allowances through the Household Benefits package which help towards heating, light and cooking costs throughout the year.

The fuel allowance increases are expected to cost €159m this year.

Today’s 17.5% ESB increase is the biggest in the history of the state.

A rise of 12.6% was sanctioned last year and a 13.3% increase was introduced in 2003.

The ESB had been hoping for an increase of up to 30% but the Commission for Energy Regulation (CER) approved just 17.5%.

The CER said it will review the international fuel market conditions in October with a view to sanctioning a further increase in January.

The ESB said it was making a €300m contribution to help offset electricity prices for consumers next year.

The company made profits of €432m in 2007.