Vulnerable households get less protection than well-off from energy price hikes, ESRI says

Figures published this week by the energy regulator showed that just under 320,000 homes were behind on their electricity bills at the end of March. File photo

The Government's "untargeted" efforts to cushion the blow of energy price hikes have done little to protect the most vulnerable while giving significant support to high-income households.

That is the charge from the Economic and Social Research Institute which, in a report to be published today, says energy price increases "have a clear regressive impact, placing a greater burden on low-income households".

Yet, the ESRI's associate research professor Dr Claire Keane said the Government's recent policy measures have been "largely untargeted" meaning a significant share of the support goes to higher-income households.

"More targeted measures could better protect vulnerable groups at a lower cost," she said.

The ESRI's criticism comes as tens of thousands of households saw their monthly mortgage repayments increase due to a 0.25% rise in interest rates by the European Central Bank, and as the CSO's latest consumer price index confirmed the cost of energy, fuel and clothes have all surged in the last 12 months.

In recent weeks, several energy companies have announced price hikes. This includes Electric Ireland, Yuno Energy and Prepaypower.

Electric Ireland, whose price rise will see increases for 1.1 million electricity customers, was among those to cite the conflict in the Middle East as driving prices upwards.

The latest crisis sparked by ongoing war in the Middle East, has prompted calls for the Government to do more to protect households from external price shocks by reducing our reliance on fossil fuels.

Figures published this week by the energy regulator showed that just under 320,000 homes were behind on their electricity bills at the end of March. The amount they owe on average has been steadily climbing in recent times, and was at €511 per household in the latest report.

The ESRI study said lower-income households spend a larger proportion of their income on energy, particularly on home heating and motor fuel, and rises in these costs put a heavier financial burden on them.

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Without the Government’s cost-of-living package, low-income households would have faced an energy price increase equivalent to 3% of their household income compared to high-income households where the increase was just 1%.

The ESRI examined the Government’s measures, which included reductions in excise duties on fuel, the suspension of the NORA levy, the extension of the fuel allowance and the deferral of planned carbon tax increases.

Its analysis found these measures reduce the immediate cost increases by approximately half, but do not fully offset the regressive nature of energy inflation. Furthermore, it said much of the benefit comes from broad-based tax reductions, which apply to all households regardless of need.

Inflation dips

Meanwhile, the CSO said its inflation rate of 3.6% for the 12 months to May was slightly down on the 3.7% recorded last month.

Some of the largest increases in the last 12 months have been in fuels such as diesel (up 20%) and petrol (up 10.1%), the cost of air travel (up 14.1%), home heating oil (up 60%) and health insurance (up 9%).

While food inflation has been stark in recent years, it has tempered to 1.2% in the year to May, according to the CSO figures.

Statistician Anthony Dawson said: “There were price increases in the 12 months to May 2026 for sirloin steak per kg (+€1.01) and Irish cheddar per kg (+8c). 

"There were decreases in the price of a pound of butter (-44c), a 2.5kg bag of potatoes (-10c), 2 litres of full fat milk (-8c) and an 800g loaf of brown sliced pan (-2c).

“The national average price for a litre of diesel in May 2026 was €1.99, an increase of 33c on the same time last year. Petrol prices rose by 17c to €1.87 a litre.” 

A pint of stout, meanwhile, now costs €6.32 on average (up 26c on last year) while the average pint of lager costs €6.75 (up 27c).