Cost of living measures must be ‘strategic’, says Taoiseach, as fuel nears €2 per litre

Ireland needs “work strategically” on tackling the cost of living, Taoiseach Micheál Martin has said, as fuel prices near €2 per litre and inflation bites across the economy.

Speaking to reporters in Belfast on Friday, Mr Martin said the Government had begun “exploratory talks” with unions about pay increases and was also looking at further measures in the Budget.

“We’ve already brought in serious reductions in public transport [costs], both for young people arising under the budget decision and more latterly in the second package we did in terms of reducing fares.”

Asked whether trade unions were reasonable in their demands for greater pay increases, given the rate of inflation, the Taoiseach said: “In my view we have to work strategically as a country in the face of a unique set of circumstances brought about by Covid-19 in the first instance, the first wave of the inflation cycle was due to that and the imbalance between demand and supply and the war in Ukraine.

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“We must do so in a way that protects jobs, that protects the economy into the future. We’re performing very well economically so far. There will be challenges, I suspect, towards the end of the year if the war continues.”

In March, the Government reduced the excise duty for diesel and petrol by 10 cent to 15 cent per litre following record prices. But according to prices reported on pumps.ie, diesel is almost €2 per litre at some pumps.

Diesel had already risen 22 cent per litre on the wholesale market at the time the cut was being implemented, so on the day the reduction was implemented, it had already been “neutralised”, Kevin McPartland of Fuels Ireland explained.

The situation in Ukraine had since put further pressure on European energy suppliers, as a result prices per barrel had gone up “very significantly” since March, he told RTÉ radio’s Today with Claire Byrne show . He warned that wholesale prices would continue to rise steadily.

On the same programme Independent TD Verona Murphy has expressed disappointment at Government efforts to reduce the cost of fuel.

Ms Murphy told that there was no will in Government to do more. “In the morning, the Government could reduce the price of fuel by 15 cent a litre” she said, by taking VAT off the excise costs

The former president of the Irish Road Haulage Association said that an acceptable price for a litre of petrol was €1 per litre.

“Fuel is the very commodity that affects everything, whether it’s the food you put in your mouth, the shoes on your feet or clothes on your back, and inflation affects the cost of fuel. If we want to reduce the cost of living we have to tackle the cost of fuel. It’s the only way,” she added.

Russia’s invasion of Ukraine, concerns over Russian oil exports to the EU and a sharp increase in transport activity worldwide since the Covid-19 pandemic have pushed fuel prices to record levels.

The Government has announced it is extending the €100 a week subsidy for lorry drivers struggling with rising fuel prices until June 6th as about 900 licensed hauliers have yet to apply for the scheme.