Dáil Éireann Debate, Thursday - 7 April 2022
60. Deputy Richard Bruton asked the Tánaiste and Minister for Enterprise, Trade and Employment the sectors which he believes are most vulnerable in the face of the explosion in the cost of oil and gas. [18474/22]
Amharc ar fhreagraRising energy prices was one of a number of factors that drove a rise in inflation since mid-2021. However, Russia’s invasion of Ukraine has sparked further energy price increases and brought unprecedented volatility to international energy markets. This is feeding through to retail price increases for all households and businesses. I understand that these rising costs, including fuel costs, have placed an additional burden on enterprises trying to get back on their feet in the aftermath of the COVID-19 shock.
Recently, the Sustainable Energy Authority of Ireland (SEAI) published its ‘HEAT Study Report’[1] , which noted that the Industry Sector in particular was already facing cost and competitiveness challenges because of the need to decarbonise and move away from fossil fuel usage. The report pointed out most industry sectors use gas to meet their heat demand needs. In Ireland, sectors which are relatively energy intensive include the Cement sector, the Commercial Activities Sector (which includes hospitality and retail), the Food and Drink Sector, and the Electrical and Optical equipment sector. However, businesses across a range of sectors are likely to be impacted by increased fuel prices through their reliance on the logistics and distribution sector to deliver their raw materials and inputs, and to bring their final products to market.
Ireland imports over 70 per cent of our energy use and the Government cannot fully insulate individuals and businesses from developments in international energy markets that are outside of our control. However, Government has put in place a suite of targeted measures aimed at reducing the burden of these cost pressures, both for businesses and households. Given the volatility of fuel prices, it is important that measures are sustainable and targeted.
To support businesses as well as households, in March the Government approved 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. The Government also launched an emergency support measure for licensed hauliers to address cost pressures arising from current high fuel prices. The targeted and temporary grant scheme will provide a payment of €100 per week for every heavy goods vehicle (over 3.5 tonnes) in the country. It will operate for a period of eight weeks and will be reviewed. The Government also agreed a temporary, targeted intervention package for the tillage sector to the value of €12.2 million. The agriculture sector has been significantly impacted by higher input prices for fuel, animal feed and fertilisers.
The Government will keep the energy situation under close review and we will continue to examine what measures are possible to manage the impact of rising energy prices for households and businesses. My Department is leading consultations with business and industry to learn about the specific impacts of higher energy costs on Irish businesses, and to hear their concerns and perspectives on the appropriate and most effective tools for policy action.
The European Commission recently launched its Temporary State Aid Crisis Framework for businesses affected by the Russian invasion of Ukraine. This opens the way for Member States to consider what specific instruments might be needed in the near-term in order to help vulnerable but viable businesses to overcome the acute impacts of the current crisis in particular with liquidity, and to gear up for meeting their longer-term investment and transition requirements. As part of the Framework, low-cost loans and grants may be made available in order to meet liquidity needs and facilitate the necessary investment.
In terms of short-term temporary supports, there are already a number of effective schemes in place resulting from Government’s response to the Brexit and Covid-19 crises, and the Government will consider whether, and to what degree, such schemes might be pivoted to firms impacted by the Ukraine crisis in particular.
[1] National-Heat-Study-Summary-Report.pdf (seai.ie)
