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Energy Price Rises Hit Low-Income Households Harder: ESRI

From El Nacional · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

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  • Recent energy price increases disproportionately affect low-income households in Ireland, according to ESRI research.
  • While government supports partially offset the impact, their untargeted nature means higher-income households also benefit significantly.
  • The report suggests more targeted measures could better protect vulnerable groups at a lower cost.

New research from the Economic and Social Research Institute (ESRI) reveals that recent surges in energy prices are placing a heavier financial burden on low-income households in Ireland. These households spend a larger portion of their income on essential energy needs, particularly home heating oil, petrol, and diesel.

In response to rising costs, the Irish government implemented several measures in March and April, including reducing fuel excise duties, suspending the National Oil Reserve Agency levy, extending fuel allowances, and deferring a Carbon Tax increase. According to the ESRI, these actions effectively halved the immediate cost impact for consumers.

While recent policy measures help to cushion the shock, their largely untargeted nature means that a significant share of the support goes to higher-income households.

— Dr Claire KeaneDr. Keane, an associate research professor at the ESRI, explains the limitations of current government supports in addressing energy price increases.

However, the report highlights that these measures, while helpful, did not fully counteract the "regressive nature of energy inflation." Dr. Claire Keane, an associate research professor at the ESRI, explained that the largely untargeted nature of the government's support means a significant portion benefits higher-income households. She suggested that more focused interventions could offer better protection to vulnerable groups more cost-effectively.

Without the government's cost-of-living package, the ESRI estimates that low-income households would have faced energy price increases equivalent to 3% of their annual income. In contrast, high-income households would have experienced an increase of only 1% of their income. This disparity underscores the disproportionate impact of energy inflation on those with the least financial flexibility.

More targeted measures could better protect vulnerable groups at a lower cost.

— Dr Claire KeaneDr. Keane suggests a more focused approach to government aid for energy costs.
DistantNews Editorial

Originally published by El Nacional in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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