Soaring energy and fuel costs see prices rise at their fastest pace in 20 years

THE pace of price increases continues to accelerate.

rice experienced its largest increase in 20 years, with the consumer price index rising 5.3% in November.

Soaring energy and fuel costs are causing inflation to continue to rise, figures from the Central Statistics Office (CSO) show.

The costs of heating oil have increased by more than 70% over the past year. And the 8pc rental cost increases are a new record.

The rate of increase of some of the price increases has not been observed for decades.

Along with the sharp rise in electricity and gas prices, there have been price increases in restaurants and hotels, and alcohol over the past year.

Rising rents continue to push up the cost of living. In November, the price index rose 0.6 pc, the CSO said. Rents are up 8.1 pc over the year, which is a new record.

Clothing and footwear prices increased during the month, as did the cost of transportation.

Over the past year, the cost of electricity has climbed 21%, and gas prices have increased 26%.

The costs of heating oil have increased by 71.4% since last year.

Prices at the pump are also up from last year as Middle Eastern oil producers resist calls to increase supply.

Gasoline costs jumped 26pc, with diesel prices rising 9pc.

The cost of operating a vehicle is up 17.5%, mainly due to the cost of repairs and spare parts.

Air fares have increased 65% in the past year.

Food prices rose almost 1% in November compared to a year ago.

Prices in restaurants and hotels have increased mainly due to an increase in the cost of hotel accommodation and higher prices for alcoholic beverages and food consumed in licensed establishments, restaurants and cafes .

There is also an increase in the cost of tobacco products and higher prices for wine sold in supermarkets and unlicensed.

The CSO statisticians recorded an 8.2 pc drop in the cost of automobile insurance, with a slight drop in the cost of home insurance.

But health insurance costs are up 3.5% from a year ago.

Davy Research chief economist Conall Mac Coille said inflation in that country is now likely near a peak as energy price increases have been passed on to consumers.

However, the fact that the inflation rate of the consumer price index excluding energy is 3.4 pc shows that there are significant pressures on prices.

This reflects the many supply chain issues plaguing Ireland and the global economy, he said.

He said the last time inflation was above 5% was during the time of the Celtic Tiger, in March 2007.

Energy prices are up 28% year-on-year, but most of them have now been implemented, with oil and gas prices stabilizing or falling recently, Mac said. Coille.

He said the 8.1 pc rise in private rental costs over the past year was a new record, well above pre-pandemic levels.

State Street Global Advisors, one of the world’s largest fund managers, said the threat of inflation is expected to subside next year.

Le Tánaiste told Dáil today that large wage increases are occurring in “most parts, but perhaps not all, of the private sector”.

He was responding to questions from Pearse Doherty of Sinn Féin, who urged the government to take action against inflation, which Leo Varadkar admitted now exceeded 5%.

Mr Doherty, his party’s finance spokesman, called for a package of measures on increases in fuel and energy costs to mitigate escalating costs for the most vulnerable.

This was being done in other European countries, he said, while here the government remained inactive amid a 71% increase in the price of electricity and home heating which is expected to cost 1,300 € additional this winter.

The Fine Gael chief admitted in response that the cost of living was “rising very rapidly” and said a program to reduce household energy bills was being drawn up within the government.

After more than a decade of little or no inflation, “we are now seeing prices rise at a rate of over 5% per year,” he said. “I don’t think we’ve seen that maybe in 20 years, and a lot of it has to do with rising fuel prices, rising energy prices. The government is very aware of this.

“We know it’s very difficult for a lot of families who are trying to make ends meet and find enough money to pay the bills at the end of the week. We know this from our own experience going to the shops and the forecourt, and receiving our electricity or gas bills in the mail.

The government was helping in at least four ways, he said – through increases in public wages, increases in social assistance and pensions, a reduction in personal income tax and assistance with the cost of living for some.

Public wage increases, increases in pensions and social benefits and the increase in the minimum wage would take effect from January, he said.

Mr Varadkar added: “A significant wage increase is occurring in most parts, but perhaps not all, of the private sector. “

A personal income tax cut would also go into effect in January, “meaning people will pay less income tax and through increases in tax credits and the standard rate range.”

“People will see their payslips in January,” he said, without acknowledging that the current 5% inflation rate will actually erode purchasing power next year compared to 2021.

But Mr Varadkar said the budget measure to freeze child care costs “will be really important for many families who spend a lot of money on child care.”

There were also reductions in the cost of drugs from January, he said. All of these actions “are expected to see inflation come down in 2022. And that is what we expect will happen with regard to energy prices in particular.”

He admitted that households in particular have a high cost of energy, saying the energy pinch was “currently under consideration”.

Mr Varadkar said: “We would definitely like to do something that would help pay the electricity bills and maybe also the gas bills.

“Minister Donohoe, Minister McGrath and Minister Ryan are working on it right now.

“And we hope to be able to make a decision on this in the near future, so that people can see the effect on the bills they receive in the new year, perhaps being a little less than what they expected. “

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