Dáil Éireann Debate, Thursday - 15 September 2022
155. Deputy Bernard J. Durkan asked the Tánaiste and Minister for Enterprise, Trade and Employment the degree to which any evaluation has taken place on foot of price increases that put in the economy and jobs in jeopardy; and if he will make a statement on the matter. [45380/22]
View answerThe top competitiveness challenge facing enterprise today is the high inflation environment and rising input prices. Many small and medium businesses around the country are seeing their margins squeezed by the rising costs of doing business, and in particular the significant increases in energy costs. The Wholesale Price Index for energy products rose by almost 78 per cent in the year to July 2022, and this spike is becoming apparent in the costs of energy intensive businesses. This is not unique to Ireland and is an issue facing all major economies around the world.
Analysis from my Department suggests that 120,000 people are directly employed in gas-intensive manufacturing sectors, with a further 275,000 employed in oil-intensive sectors. That is where gas or oil is used to meet 40 per cent, or more, of that sector’s energy requirement. Exposure to electricity price increases is more broad-based across all economic sectors. As wholesale gas prices drive changes in electricity costs to a significant degree, there is a wider range of sectors with an indirect exposure to changes in gas prices.
While it is useful to consider the numbers employed and the energy intensity of the economic sectors to gain a broad understanding of sectoral exposure to energy, it would be incorrect to imply that all jobs in energy intense sectors are at risk. Any potential employment impacts would depend on decisions taken at the firm level and are, therefore, very difficult to predict given the individual nature of each firm’s cost base.
Ireland imports over 70 per cent of our energy needs and the Government cannot fully insulate businesses from price developments in international energy markets that are mostly outside of our control. However, measures have included a reduction in the rate of VAT on gas and electricity from 13.5 per cent to 9 per cent until the 31st of October; and a temporary reduction in the excise duties charged, by 20 cent per litre of petrol, 15 cent per litre of diesel, and 2 cent in the excise duty charged on marked gas oil. Measures are also being actively explored at a European level to tackle the costs of energy to households and business, while further actions are being considered for introduction under Budget 2023.
My Department continues to engage with other Departments and Agencies to identify the scale and impact of energy price increases on firms, including small and medium enterprises. Measures are also being actively explored at a European level to tackle the costs of energy to business, while further actions are being considered for introduction under Budget 2023.
