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Irish consumer prices rise 5.3% during biggest annual increase in 20 years

Soaring petrol, diesel and energy prices continue to drive inflation, the CSO said.

LAST UPDATE | Dec 9th 2021, 1:49 PM

MEASURES WILL BE taken by government to reduce peoples’ energy bills “a little bit” in the new year, according to Tánaiste Leo Varadkar. 

His comments in the Dáil come as the Central Statistics Office (CSO) reports today that Irish consumer prices were 5.3% higher in November than a year ago — the largest annual change in prices since 2001.

Prices increased by 0.6% within the month of November, marking the 13th consecutive month of inflation.

The annual increase is mostly being driven mainly by soaring diesel and petrol prices as well as electricity bills and gas bills, according to the latest Consumer Price Index.

Transport prices — which includes, among other things, the cost of vehicles and prices paid by motorists at the pump — had increased by over 16% in the year to the end of November.

The price of petrol was up 27.5% over the 12 months and up 3.7% in November from October after the Government increased the carbon tax in October’s Budget.

The price of diesel, meanwhile, had increased by 26% in the year and 3.5% in the month of November.

Housing, electricity, water, gas and home heating prices jumped an overall 12% in the year and just over 0.2% in November alone.

Electricity prices had increased by almost 5% in the month, up nearly 21% over the 12 months, according to the figures.

Such figures were highlighted in the Dáil today by Sinn Féin’s Pearse Doherty who called on the government to do more to help people who are facing mounting bills this winter. 

Replying, Varadkar said the the European Union issued a ‘toolbox’ options available to EU member States that would help assist families and households with the high cost of energy.  

“These are currently under consideration. We would certainly like to do something to help with electricity bills and perhaps also gas bills,” he said. 

The Tánaiste confirmed that Finance Minister Paschal Donohoe and Public Expenditure Minister Michael McGrath are working with the Environment Minister Eamon Ryan on the matter.

“We hope to be in a position to make a decision on that in the near future so that people will see the effects of that decision in the bills they receive being a little bit lower than expected in the new year,” he said. 

It is understood that a memo will go to Cabinet next week outlining some of the measures the government plan to introduce. 

Some of the immediate measures suggested in the EU toolbox to help protect vulnerable consumers and businesses include providing emergency income support for energy-poor consumers as well as allowing for temporary deferrals of bill payments.

It is suggested the governments can introduce safeguards to avoid disconnections from electricity grids and also to give temporary, targeted reductions in taxation rates for vulnerable households. 

Varadkar acknowledged the rapid rise in inflation, with consumer prices steadily increasing month on month, rising above the European Central Bank’s (ECB’s) target of 2% for the first time in July.  

He said the Government is very much of the view that “we need to take action and do something to help people with their energy bills in the new year”.

“We are particularly focusing on electricity because it is a bill everyone gets. It is something that people have to use.  

“They do not have any choice as to what type of energy to use and must use what comes in on the wires. We are working on that at the moment.  As I have said, if we are going to do something that will have an impact on people’s bills in the new year, we will have to make a decision in the next week or two,” he added. 

Eurozone inflation hit 4.9% last month, a record high. It’s not expected to fall back to 2% until the second half of 2022, ECB Vice President Luis de Guindos said yesterday.

Within the month of November, the most significant monthly price changes were increases in clothing and footwear (+3.3%) and transport (+1.3%), the CSO said. 

Meanwhile, prices decreased in the alcoholic beverages and tobacco (-0.7%) and restaurants and hotels (-0.1%) categories.

In response to the fourth wave of Covid-19 infections in Ireland, public health officials have been advising people to once again reduce their social contacts in a bid to curb the spread of the disease. 

Last month, a Department of Health-commissioned survey suggested that nearly half of Irish adults had cancelled social plans in response to the worsening public health outlook. This may have reduced demand for pubs, restaurants and hotels in the month leading to slight declines in prices for goods and services in those sectors.

With reporting by Christina Finn

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