Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

I thank the Deputy, all Members of the House and many well-wishers for their kind remarks in the aftermath of my brush with Covid. Thankfully, it was a light brush and probably points to the value of vaccination. I urge anybody who is not vaccinated to get the booster.

There is no doubt that there has been a severe increase in the cost of living in recent months. As we emerged from Covid we had an initial inflationary cycle which was described by the Central Bank as a pandemic cycle of inflation because of the imbalance between supply and demand. There was huge demand as people and societies emerged from Covid. Economies rebounded, supply chains were under strain, manufacturing could not keep up with the demand and prices rose.

Prior to the war on Ukraine, the energy market was being manipulated, in our view, to create spikes in prices and challenges around energy. There is no doubt that the energy question is being leveraged by the Russian Federation in respect of the conduct of the war. The war itself is significantly adding to and making worse the inflationary pressures on our economy, particularly on households and people generally. That is across the board, particularly in energy, but it will be manifested in food and other commodities, particularly certain metals. Russia and Ukraine account for about 30% of global exports of wheat, 7% of maize and more than 50% of sunflower seed oil. Together they produce 12% of calories consumed globally. Ukraine supplies about a quarter of the European Union's cereal and vegetable oil imports.

There will be ongoing impacts from the war, over and above what we have witnessed to date. Transport routes have been disrupted because of the war so the cost of trade is increasing. For example, rail freight between Asia and Europe via Russia or Ukraine is interrupted. Trade has switched to sea freight, which is slower and more costly. Sea freight routes through the Black Sea are affected. The annual rate of inflation in Ireland rose to 5.7% in February. Euro area inflation was 5.8%. Wholesale oil prices are up 40% compared to January, on average, and gas prices are up 60%. The cost of base metals and agricultural commodities has also surged. A barrel of oil costs $114 today on international markets, up from $96 on 23 February. UK natural gas on wholesale markets is trading at around £2.45 per therm today. This day last year a therm of gas cost 47p. Wages went up 4.7% in 2021, following a rise of 5.2% in 2020.

This dramatic and phenomenal increase in prices is having impacts. The Government has, from the budget on, produced close to €2 billion in income supports and targeted measures around energy, in particular, and other areas through welfare payments, in response to the increase in inflation.

We have also targeted measures for hauliers, tillage farmers and the pig meat sector and we are looking at other sectors. Regarding the EU, we sought an amendment to the conclusions to create the opportunity for flexibility around the VAT and energy tax directives, which restrict us now. We were not ignoring anything. We simply pointed out at the time that what Sinn Féin was asking for could not be done then because of the regulations. We do not want to go back to 23% in respect of oil once this crisis is over. On home heating-----

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