Government efforts to cushion the blow of spiralling energy bills has “reduced — but not eliminated — the cost pressures facing households”. That’s according to the Economic and Social Research Institute (ESRI).
The government extended a low VAT rate of nine percent in the budget and widened a Fuel Allowance scheme amongst other measures.
But the ESRI said that there is still a “disproportionate burden” of high prices on low-income households.
Yesterday, it was revealed that the Commission for Regulation of Utilities estimates that there are now more than half a million Irish households are now in energy arrears.
In its latest report, published this morning, the ESRI said that rising energy prices in 2026 are “highly regressive, affecting low-income households relatively more than high-income households.
The study also shows that recent government measures have reduced — but not eliminated — the cost pressures facing households.”
The ESRI examined how the latest surge in energy prices is affecting households across different income bands.
It found that lower-income households spend a larger proportion of their income on energy, particularly on home heating and motor fuels.
As a result, increases in fuel and heating costs place a heavier financial burden on low-income households.
Associate Research Professor at the ESRI, Dr Claire Keane, said government support was not focused enough.
“Energy price increases have a clear regressive impact, placing a greater burden on low-income households. 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. More targeted measures could better protect vulnerable groups at a lower cost.”
“Ongoing energy price volatility and potential future fines for failing to meet EU greenhouse gas emission targets highlight the reliance on fossil fuels in Ireland and the need to reduce such a reliance,” she added.