Households facing 'emergency' in trying to heat their homes this winter

Detailed CSO figures starkly underscore the pressures Irish consumers are facing with energy costs.

Households face a 'potential emergency' this winter trying to heat their homes as energy prices soar even higher, the Money Advice and Budgeting Service (Mabs) has said.

The warning came as CSO figures show inflation reached a 13-year high in September, driven by a huge spike in fuel costs. 

With global oil and gas prices continuing to rise, household bills are set to increase further when the energy hikes are passed onto consumers in their utility bills this winter.

Michelle O’Hara, national spokeswoman for Mabs which is government funded, said she has growing concerns about fuel poverty among a widening group of households. 

Further action may be required “to meet a potential emergency this winter”, she said.

There are people who are “just about coping at the moment”. 

Those who struggled to pay their bills because of the Covid crisis are now facing further struggles.

She said Mabs is hearing from people who are already looking to heat just one room in their home to be able to pay their bills.

Fuel poverty, heat poverty, call it what you like. Heat and light are the two issues we would be concerned about this winter.

Paul Joyce, senior policy analyst at the Free Legal Advice Centres (Flac) said a range of social payments will likely need to be increased for households to meet the rising bills.

Consumer prices in most of Europe and around the world are surging from a perfect storm of sharp increases in oil and gas prices amid low stocks of gas that power stations use to generate electricity just as the continent heads into winter. 

The Irish headline rate of inflation will likely peak at 4.5% this winter, reflecting higher oil and gas prices already in the pipeline, and then start to level off, said Austin Hughes, chief economist at KBC Bank Ireland.

Detailed CSO figures starkly underscore the pressures Irish consumers are facing with energy costs. 

Sub-categories show that the costs of energy products rose 1.3% from August, by 6.7% in the last three months, and were 18.4% more expensive than September last year.

Energy cost hikes are showing no let-up. The price of crude oil rose above $84 (€72) a barrel yesterday amid expectations that soaring natural gas prices will drive a switch to oil to meet winter heating needs.

That has fed fears that the era of low consumer price inflation, and cheap food, remarkable features of the European economy for years, are drawing to an end, although central banks around the world maintain that price hikes will ease as the global economy readjusts next year.

The ESRI has said changes announced in Budget 2022 will, on average, compensate households for forecast price growth and leave poverty slightly lower than would an inflation-proofed budget.

However, it said some low-income working parents and retired couples will see real cuts to their payments and others may if price rises turn out to be larger than forecast.