I propose to take Questions Nos. 167 and 168 together.
The Central Statistics Office (CSO) is responsible for the compilation and publication of the Consumer Price Index (CPI). The CPI measures prices across a representative basket of goods and services consumed by households and, as such, individual components can experience price changes that differ from aggregate developments.
Data on price changes for individual commodity groups are published on the CSO website. In June, on an annual basis, prices for home heating oil and diesel increased by 48.7 and 13.9 per cent respectively, while prices for eggs increased by 10 per cent on an annual basis. Prices for the commodity group ‘fish, live, fresh, chilled or frozen’ increased by 3.8 per cent on annual basis in June. This compares with overall annual CPI inflation of 3.4 per cent in June.
The weights for individual items used in the compilation of the CPI are representative of the spending of all households and are updated annually by the CSO. Where individual products make up a higher proportion of households’ spending, the impact of price changes in these products on these households will be greater. My Department incorporates developments in subcomponents of the inflation basket, including food and energy, on a ‘bottom up’ basis in its forecasts for aggregate inflation.
Government is acutely conscious of the very real pressures that higher energy prices have placed on households. That is why Government has already intervened on a significant scale, with supports of over €1 billion to help mitigate the impact of elevated energy prices on households and businesses.
The first package of supports, introduced at the end of March, reduced the tax on fuel and extended the fuel allowance by an additional four weeks. A further package of measures was introduced in April. This further cut the tax on fuel, bringing the total reduction on diesel to 32 cent per litre and 27 cent per litre for petrol. The scheduled increase in carbon tax has also been delayed to later in the year.
The direct impact of these measures are estimated by my Department to reduce the annual rate of inflation by c. ½ percentage point. This estimate is based on the weights for fuel products used in the compilation of inflation statistics by the CSO. Where fuel products make up a higher proportion of households’ spending, the impact of these measures will be greater.
On June 30th, Government announced that these temporary reductions on fuel would be further extended until the end of August, but a pathway was also established to gradually unwind the tax on fuels to pre-conflict levels. This strikes the balance between responding to the pressures of today and maintaining our public finances on a sustainable pathway over the medium-term.
