Government ‘balancing action now with keeping some powder dry for time ahead’

The Government is balancing action on fuel prices now with preparing for potentially worse to come.

Tanaiste Simon Harris was speaking as it emerged that a rise in the cost of energy has pushed the rate of inflation in Ireland to 3.6%.

Last week a temporary excise duty reduction for motor fuels, expansion of the diesel rebate scheme for hauliers and bus operators, and an extension of the fuel allowance were announced in response to rising fuel prices in the wake of the war in the Gulf.

Mr Harris said that the latest inflation figures vindicated the intervention last week.

However he ruled out introducing travel restrictions.

He said he was conscious people have adapted because of the increase in the price of fuel but said there are “no plans to adapt people’s travel schedules”.

Speaking to reporters during a visit to Nenagh on Monday, the Tanaiste said the Government is keeping actions under review.

“If this conflict goes on for a prolonged period of time, the scale of economic challenge that the world will face, and Ireland will not be immune from that, will be very significant,” he said.

“I have got to get the balance right between acting now to help people like we did last week, and we will keep that under review, but also making sure we keep some economic powder dry for the time ahead.

“We’re fortunate to live in a country that does have a degree of economic firepower, full employment, budgetary surpluses, money set aside in terms of fiscal buffers, that’s all important, but the words really have stuck with me that I heard from the IEA (International Energy Agency) the other day – there was an oil crisis in 1973, there was an oil crisis in 1976, there was a gas crisis in 2022, and this current energy crisis globally is larger than all three combined, and is ongoing and worsening by the day.”

Mr Harris acknowledged “huge frustration” across the country and across the globe.

“But we will respond in Ireland, we will get through this in Ireland, we will get through it from a position of strength, but I do have to advise the Irish people that really the only sensible, responsible course of action to take is step by step,” he said.

“We’re continuing to engage, I’ll be meeting the IFA (Irish Farmers Association) and farm contractors later in the week with the Minister of Agriculture, we’re continuing to listen and trying to get that balance between responding in the here and now, and preparing for what could be a very difficult time ahead.”

He added: “We’re trying to help as a government, trying to take practical measures, we have staged one of the biggest interventions in the European Union last week per head of population, but no government in the world can absorb, or should absorb, all of the cost, it’s not possible economically.

“So we’ll obviously have to look at what the scenario looks like each and every month, what’s the best advice to provide to our people, what’s the best level of intervention to make, but we’re not in the space around supply at the moment.”