Minister should focus ire on energy companies over banks

On Monday, Minister for Finance Michael McGrath said he wanted Irish banks to increase their interest rates for depositors, following a series of rate hikes of from the ECB over the past 13 months. He was right to criticise the banks for their miserly rates, although the National Treasury Management Agency has been glacially slow in improving the rates on offer for State savings products. This is set to change, we are told.

So some good news for those with surplus cash in their bank accounts.

But most consumers – and certainly those on low incomes – would prefer if the Minister focused his attention on energy providers, and pressured them to lower their prices. A report commissioned by the Austrian and Hungarian energy regulators showed this week that household electricity costs in Dublin are the highest in the European Union with Irish consumers facing annual bills that are about €800 more than the EU average.

The findings will have resonated with consumers here.

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[ Energy bills set to fall but do not count on savings just yet ]

On Tuesday, figures from the CSO showed that wholesale electricity prices fell by 17.9 per cent in July and were 64 per cent lower on an annual basis. Yet the prices being charged to households remain stubbornly elevated.

This week the Commission for Regulation of Utilities (CRU) said it expects prices to fall in the fourth quarter of this year but the energy providers remain coy on the subject. For the most part they say that prices are constantly kept under review and note how them employ hedging policies that can involve purchasing fuel some 18 months ahead of time, arguing that this has protected consumers against even higher prices since energy costs began to spike around the time of Russia’s invasion of Ukraine.

Let’s hope the CRU’s analysis is correct, and that the entry of Yuno Energy into the residential market this week will add some much-needed competition in the sector. Bringing energy prices down would put more money into most people’s pockets than a marginal hike in deposit interest rates.