ESRI Report: Energy Price Rises Disproportionately Affect Low-Income Households Despite Government Supports

A new report from the Economic and Social Research Institute (ESRI) indicates that recent energy price increases have disproportionately impacted low-income households, with government support measures only partially mitigating the effects.

The study highlights that lower-income households allocate a greater percentage of their income to energy expenses, particularly for home heating oil, petrol, and diesel. Consequently, rising fuel and heating costs impose a more substantial financial strain on less affluent segments of the population.

In March and April, the government implemented several measures to alleviate these costs, including reducing excise duty on fuel, suspending the National Oil Reserve Agency levy, extending the fuel allowance, and postponing an increase in the Carbon Tax. The ESRI noted that these interventions reduced the immediate cost by half; however, they did not fully counteract the «regressive nature of energy inflation».

Dr. Claire Keane, an associate research professor at the ESRI, commented, «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.» She further suggested that «More targeted measures could better protect vulnerable groups at a lower cost.» The report also revealed that without the government's cost-of-living package, low-income households would have experienced energy price increases equivalent to 3% of their household income, whereas high-income households would have faced a 1% increase.