In net terms, Irish consumers pay 53pc above European average
Irish people are paying well above the EU average for energy, new data shows, as governments around the bloc take measures to cap prices.
EU leaders will discuss the crisis at a summit in Brussels today with the President of the European Commission, Ursula von der Leyen, urging them yesterday to do more to lower energy taxes.
But data from the EU’s statistics agency, Eurostat, shows taxes are relatively low in Ireland compared to Denmark, Germany or Belgium, though underlying energy costs are much higher here.
Electricity prices for Irish households were fourth highest in the EU in the first half of 2021 – around 18pc above EU average – but they rise to the number one spot when taxes are stripped out. This means that, in net terms, Irish consumers pay 53pc above the EU average.
Natural gas prices are around 25pc higher than the EU average when taxes are stripped out.
Michael Kilcoyne, head of the Consumers’ Association of Ireland, said the Government should still consider reducing the 13.5pc Vat on energy.
“There will be people who will be cold this winter as a result of government policy,” he said.
“For those who can afford to go out to eat in the hospitality industry, it’s only 9pc Vat. The people who can’t afford to go out, and have to cook at home, are paying 13.5pc.”
Last week the European Commission said governments can reduce Vat and energy taxes, issue fuel vouchers, defer utility bills and ban grid disconnections to help families get through the winter months.
France, Spain and Greece have capped fuel prices until next spring, while Greece, Belgium and France are issuing one-off fuel vouchers of up to €100 to the poorest households this season.
A spokesperson for the Department of the Environment said last week that the Government “already has in place many of the measures proposed by the Commission”.
Green MEP Ciarán Cuffe said the Government is “considering all options” to halt the rise in prices.
“There is no doubt about it, energy prices are high, and I think we do need measures to help the consumer.
“I don’t think now is the time for energy companies to be making huge profits at the expense of ordinary consumers. The Irish Government should look around Europe and see what is being done in other countries.”
Growing energy demand,
including from data centres, coupled with cold weather and low winds has eaten into gas stocks and lowered renewable generation, putting pressure on costs. Wholesale gas prices – paid by utility companies to generators – are up more than 200pc across Europe this year.
The extended outage of two gas plants in Ireland has contributed to the spike in prices this year, with gas accounting for around 50pc of Irish electricity generation.
Ireland’s location, market size and a lack of pipeline links to Europe don’t help.
High transmission tariffs – costs paid by firms to Eirgrid or Gas Networks Ireland to distribute energy around the country – also force up consumer prices, according to Daragh Cassidy of comparison website Bonkers.ie.
He said all of Ireland’s 14 energy suppliers have increased their prices at least once this year, adding an average of €700-€800 extra a year to household bills.