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Fuel poverty crisis clearly needs a strategic response

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When you spend more than 10pc of your income on fuel, the experts tell us, you are in “fuel poverty.” A study by the Economic and Social Research Institute (ESRI), looking at this crucial issue, found that nearly one in three Irish households are now in this predicament.

Given the worrying price increases, especially since the start of this year, this is not any great surprise to most people. However, the ESRI study is useful in quantifying the extent of a critical problem which, sadly, can only worsen in the coming weeks.

The ESRI report is a timely warning to put supports in place before winter energy demands intensify. In essence, a winter-ready plan must be framed very soon. 

In fact, the study’s authors admit they are probably understating things because they could only take account of price rises between January 2020 and last April. We know most energy providers have delivered hefty price hikes in the past month. These were not fully factored in, but the ESRI tells us that when they are taken into account, the volume of people in fuel poverty could rise to more than four out of 10. It is a sobering thought to consider that the ratio in fuel poverty as recently as 2015 was one in eight people.

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Things become more alarming still when you consider the equally soaring price of diesel and petrol on garage forecourts. Little expertise is required to know that people are hurting because of all these rising prices, and we are right to fear that a winter crisis looms when people will struggle to heat their homes.

We already know that up until very recently, some families had to choose between heating and eating. Within weeks, that spectre will return. That dire situation raises fundamental questions about the value of our democracy and the sustainability of social cohesion. So, the time has come to park the political point-scoring and focus on what practical things can be done. It will be useful in any discussion of potential remedies to first acknowledge that these problems are common to the western world, and that surging post-Covid demand and struggling supply lines have been worsened by war in Ukraine.

The Government has a central role in delivering remedies here, but it cannot do everything, and some of its efforts to help can make things worse by pumping more money into the system and further fuelling inflation.

It is a plain fact that the Government has so far delivered supports worth about €2.4bn, and more is promised in next October’s Budget – if not earlier. There are increasing signals that things will happen sooner than Budget day, which is a good thing, provided these are thought through. 

It is tempting to take a pragmatic politicians’ view and deliver broad-based helps, but such an approach will be counter-productive and neglect the most vulnerable who are in fuel poverty – or soon to be in that parlous position. That is why additional measures must be imaginative and targeted at those most in need.

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