Warning that Russian gas could be cut off adds to worries of hard-pressed families 

Warning that Russian gas could be cut off adds to worries of hard-pressed families 

Staff at the Yamal-Europe gas transfer station near Nesvizh, 130km west of Minsk in Belarus. The supply of Russian gas to Europe may be cut off, adding further to the pressure on fuel prices. Picture: Viktor Drachev/AFP/Getty

The Government has warned that a complete shut-off of Russian gas supplies to Europe cannot be ruled out, as it confirmed a package of cost-of-living support measures will be announced in the autumn.

Announcing the summer economic statement, Public Expenditure Minister Michael McGrath and Finance Minister Paschal Donohoe said the focus would be on easing pressure on households, with €6.7bn available in expenditure in a budget that has been brought forward to September to reflect the urgency of the crisis.

Outside of the budget, Mr McGrath has said he would “like to have the scope” to increase fuel allowance payments but stressed that autumn was the “appropriate time” for such an intervention when energy use rises.

Sources have said it’s likely there will be an extension of fuel rebates, another €200 energy credit, and an autumn welfare bonus to help ease the burden.

More immediately, it is understood the Government will increase the rate of the back-to-school allowance within days. However, the summer economic statement warns that a complete shut-off of Russian gas is a significant risk to the economy.

“Risks to the economic outlook are now firmly tilted to the downside. In particular, a complete withdrawal of Russian natural gas supplies to continental Europe cannot be ruled out, a situation which would cause severe economic disruption in our main export markets.”

Mr Donohoe declined to predict what the impact would be based on modelling from his department but claimed the main hit would be on the “export markets that are already making decisions about the availability of fuel”.

He said gas was “not yet a challenge that we have had to confront” but it remained a risk to be considered.

Household fuel suppliers are already seeing an impact on spending patterns, with a rise in larger purchases by those who can afford it.

East Cork coal supplier Donal McGrath, owner of Midleton Aggregates, said more and more people were bulk buying to avoid being hit with higher prices in the months ahead, while many elderly people were already fearing the winter.

“People are in shock that it’s €32-€35 for a 40kg bag of coal and everyone thinks it could be up to €40 by Christmas,” said Mr McGrath. 

People just can’t afford to buy it.

“A lot of my customers are elderly and they tell me that the fire keeps them company during winter. It’s what gets them through the long evenings.

“Last year the Government wanted to promote smokeless coal but it’s more expensive and people are struggling as it is. I feel for customers when I can tell they are making do on less than what they need but what can you do.”

Aidan Foley of Mid Kerry Fuels said he had an increasing number of customers whose bills were being covered by the Society of Saint Vincent de Paul. He said: 

We deliver coal to people who are being covered by St Vincent de Paul and we always have, but now my own regular customers are ending up on that list.

“It isn’t just older people — in some cases, it would be younger families too.

“I know one woman in her 70s who would typically go through three bags of coal a week in winter to heat her home. She told me that this year she will only be able to afford one — she’ll go cold.

“Another man of the same age told me that he isn’t able to get the fuel allowance this year because his wife has died and, according to the Government’s means testing, he isn’t entitled to it as a single man. He survives on around €200 a week as it is, it’s shocking.

“I’d invite the environment minister down to Kerry to see how people are surviving in places like Dingle. He has no idea. This is the first year in a long time that I’ve supplied turf because it’s all some can afford.”

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