€200 electricity subsidy wiped out in just one bill as TDs now seek to defer carbon tax

The €200 government electricity loan paid out from this month will not even cover the cost of one bill after another week of crippling price hikes.

The one-time loan was praised as a bulwark against galloping increases in energy prices, which put a massive strain on household budgets.

the Irish Independent can reveal that Panda Power is the latest utility to announce double-digit price increases.

It comes as SSE Airtricity, Bord Gáis, Energia, ESB’s Electric Ireland and PrepayPower have already announced plans for price increases this year.

Each bi-monthly bill is now calculated at almost €270 after the last round of raises, which equates to an annual bill of around €1,600.

The subsidy of 200 € will be wiped out in just one invoice.

Further measures such as a VAT cut and an additional energy credit to be paid before next winter are becoming increasingly likely, according to price comparison portal Bonkers.ie’s Daragh Cassidy.

With petrol and diesel prices above €2 per liter in recent weeks, the government introduced a temporary reduction in excise duty. That saw 20 cents less the price of a liter of petrol and 15 cents less diesel.

However, frustration remains at the policy response to the cost-of-living crisis as customers have been hammered with another series of big energy hikes this week.

A bunch of government TDs are now planning a revolt against the carbon tax.

A group of TDs from both Fine Gael and Fianna Fáil are increasing pressure to delay the tax hike – which will raise the cost of fuel and heating oil – until energy prices come down.

The move could put the two parties on a collision course with the Green Party, which insists on carbon tax hikes to help the government meet its climate targets.

A group of Fine Gael backbenchers tabled a motion with their parliamentary group yesterday calling for a debate and vote on postponing the carbon tax hike. This weekend they are looking for private support from colleagues.

Former Rural Affairs Minister Michael Ring, who supports the motion, said the country had turned back into a “rip-off republic”.

In Fianna Fáil, Carlow-Kilkenny TD John McGuinness said he would be reaching out to colleagues this weekend to see if a similar application should be denied.

Limerick TD and former Secretary of State Willie O’Dea said he would raise the issue with the Taoiseach.

“If there is an increase in the carbon tax, compensatory measures should be taken from May 1 to offset its impact on people,” he said.

The government took 652 million euros from its CO2 tax last year. Treasury Secretary Paschal Donohoe has unveiled the huge tax revenue, nearly a third more than the €493 million raised in 2020.

Early figures also show that tax revenues will continue to grow towards €1 billion this year if current trends continue.

In the first two months of 2022 alone, the tax raised €136 million, Mr Donohoe said in response to a parliamentary question from Sinn Féin TD Matt Carthy.

The carbon tax was introduced in 2009 as the government tried to reduce Ireland’s carbon emissions.

The tax levied on fuels, from petrol and diesel to gas and kerosene, was increased by Mr Donohoe in the last budget. For heating fuels such as gas, solid fuels and kerosene, however, the increase will not come into force until May 1st.

However, the increase was immediately applied to motor fuels last October, with petrol increasing by about 2 cents a liter and diesel by 2.5 cents.

The government insists the money is earmarked and is helping to cut fuel bills by compensating low-income households.

It is also used to provide a “just transition” for workers in energy sectors such as peat-fired power plants that have closed or are about to close.

Energy companies, including the state-owned ESB, have increased electricity and gas prices.

ESB’s Electric Ireland unit announced this week that it will increase the price of electricity by 23 per cent from May 1 and the price of gas by 25 per cent.

SSE Airtricity also announced increases in electricity and gas from early next month.

Electricity is up 24 percent in a move that’s coming €338 on the typical annual household bill. Gas is up 32.3 percent, adding €333 to the typical annual bill.

Panda Power, which announced five price hikes last year, raised electricity prices again by 14.7 percent and gas prices by 14.9 percent in May.

This increases the average electricity bill by €290 per year and the average gas bill by €207 per year.