Workers in Ireland need a substantial pay rise to match CEOs’ pay rises and profits

As every worker knows, the cost of living is spiralling far beyond pay increases. More and more working families have their backs against the wall, trying to survive. In particular, the cost of energy has been rising for the last eighteen months or more, which has been added to from illegal US sanctions against Russia for its invasion of Ukraine.

Massive profit-gouging has been carried on by the global energy corporations, at the expense of working people, while grocery prices have risen by 7¾ per cent against what they were a year ago.

The latest figures from Eurostat show that Ireland has the fourth-highest residential electricity prices in the EU. Electric Ireland announced an increase in its unit rate of 11.35 per cent and for gas of 32 per cent. Its standing charges also increased by the same amounts. These changes came into effect for more than a million customers from August.

The following energy companies have already implemented price increases, with more to follow.

  • Prepay Power increased electricity by 9.9 per cent and gas by 19.9 per cent from April.
  • Bord Gáis Energy raised electricity and gas prices in April 2022. Gas will go up by 39 per cent and electricity by 27 per cent.
  • Energia increased its prices by 15 per cent from April.
  • Electric Ireland introduced a price increase of 23 per cent on electricity and 25 per cent on gas in May.
  • SSE Airtricity increased its standard household gas and electricity unit prices by 24 and 32 per cent, respectively, from May.
  • Panda Power increased electricity by 14¾ per cent and gas bills by 15 per cent from May.
  • Flogas raised electricity prices by 27 per cent and natural gas prices by 29 per cent from May.

The cost of household energy is spiralling, with more than thirty different price increases announced over the past year. According to the Government’s most recent strategy for tackling energy poverty, up to 28 per cent of households are in “energy poverty,” or at risk, equivalent to some 475,000 households.

It is very likely that energy poverty will increase considerably in 2022, as the annual inflation rate for energy products was 43½ per cent by March. The Society of St Vincent de Paul experienced a 49 per cent increase in the number of requests for help with energy costs in February 2022 compared with the same period last year.

Profits soared for energy companies between 2020 and 2022.

The ESB announced a pre-tax profit of €670 million in March, paying a dividend of €126 million to the government, while the Irish arm of the company that operates the Corrib gas field, Vermillion Energy, recorded a profit of more than €760 million last year.

Bord Gáis Energy’s operating profits rose by 74 per cent in the first half of the year, as its British parent company, Centrica, also reported a massive jump in earnings. It had an adjusted profit of £33 million (€39.5 million) in the first six months of 2022, compared with a profit of £19 million (€22.7 million) in the same period last year.

Bord Gáis Energy raised prices three times in the past twelve months, with significant increases in August and October 2021 and again in April 2022. Centrica, the owners of Bord Gáis Energy, announced a group profit of £1.34 billion for the six-month period—more than five times the amount it earned a year before.

Bord Gáis Éireann was once a state company. Under EU competition rules it was broken into two separate companies, privatised as a condition of the EU-IMF “bail-out,” which required the government to sell off some state-owned assets to help pay off loans and reduce Ireland’s debt burden. The state was too willing, and servile, to oppose such a strategy. In 2012 it announced that it would sell Bord Gáis Energy, its customer supply arm, as required under the terms. Then, in 2014, it was sold to a consortium of Icon Infrastructure, Centrica and Brookfield for €1.1 billion.

Global energy corporations have the people by the throat.

At the global level, the largest oil and gas producers made close to $100 billion in the first quarter of 2022, with Shell making $9.1 billion in profit, almost three times what it made in the same period last year, while Exxon made $8.8 billion. Twenty-eight of the largest producers made close to $100 billion in combined profits in the first three months of 2022; in 2021 the same companies made a combined profit of $183.9 billion.

War is very profitable for global oil corporations.

While the media have been blaming the Russian invasion of Ukraine for rising energy costs, they ignore the fact that it is the illegal sanctions imposed on Russia that contributed to the increase in energy prices and thereby the huge increase in profits for the global energy corporations.

Wars are good for profits, and not only for the arms manufacturers.

For all the talk of sanctions, from April to June this year Saudi Arabia imported 647,000 tonnes (48,000 barrels per day) of fuel oil from Russia by way of Russian and Estonian ports. That was up from 320,000 tonnes in the same period a year ago. Estonia is a member of the European Union.

The Russians are selling their fuel oil at knock-down prices. This benefits the Saudi regime during a period of peak summer demand, at a time when the Biden government has been trying to twist the arms of the Saudi regime to increase oil production.

Saudi Arabia is in a bind. It and Russia are two of the largest oil exporters. It has to maintain its co-operation with Russia in the alliance of global producers known as OPEC+. The two are the de facto leaders of OPEC and non-OPEC producers, respectively, in that group. The Saudi regime has been importing Russian fuel oil, which can reduce its need to refine crude oil for products and cut the amount of oil it needs to burn for power generation, thereby leaving it with more unrefined crude to sell on international markets, at higher prices.

The oil sanctions are having an impact not on Russia but on working people and the poor around the world. The sanctions have provided a great cover for massive profit-gouging by the global energy corporations.

The Irish government is in effect supporting the NATO proxy war in Ukraine when it should be pursuing a peace strategy and demanding a ceasefire and peace negotiations under the auspices of the United Nations, the ending of all arms shipments to Ukraine, and the lifting of sanctions.

Irish workers need to be demanding the public ownership of all energy companies and all natural resources, including energy sources such as oil and gas, both on land and in our territorial waters, regardless of what EU rules demand.

Irish workers need a pay increase to match inflation, as do those on state benefits. Working people must come first, not EU rules, which are only there to protect and advance the interests of European and global monopoly capitalist corporations.