Energy prices rose by 3% of incomes for some of the poorest households in the country

RISING ENERGY PRICES are disproportionately affecting low-income households, and government supports aren’t targeted enough, new research shows. Some of the poorest people in the country saw 3% of their household income eaten up by extra gas and electricity costs. A number of providers have announced further prices rises in the months to come, citing the US-Israeli war against Iran. The war has led to the effective closure of the economically vital Strait of Hormuz, causing fuel shortages around the world. The Economic and Social Research Institute (ESRI) examined how people across Ireland are finding the “highly-regressive” price hikes as of April and May 2026, when the government commenced two support packages. 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 them compared to higher earners. The pressure is partly alleviated by the government’s cost-of-living measures. These include the reduction in excise duties on fuel and the suspension of the NORA levy, which is a 2c tax on every litre of oil and petrol. The ESRI also took into account that the government extended the Fuel Allowance season and the deferred planned carbon tax increases. The analysis finds that these measures reduce the immediate energy cost increases by approximately half, but they don’t fully offset “the regressive nature of energy inflation”. Without these, the ESRI says, low-income households would face an energy price increase equivalent to 3% of their household income, while high-income households see only a 1% increase. Much of the benefit of the government’s supports comes from broad-based tax reductions, which apply to all households regardless of need, the ESRI highlighted. Dr Claire Keane, Associate Research Professor at the ESRI, said 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,” she said. “More targeted measures could better protect vulnerable groups at a lower cost.” She added that, Ireland is relying too heavily on fossil fuels, particularly considering how volatile pricing is. Ireland currently risks being fined up to €26 million by the EU for missing its greenhouse gas emissions target.