Taoiseach Micheal Martin has warned that fuel prices are set to rise even further as a result of Germany stalling a major pipeline project as part of sanctions against Russia.
Germany made the decision to shelve the Nord Stream 2 gas pipeline between them and Russia after Russian President Vladimir Putin sent troops into Ukraine.
The interruption in plans will significantly impact Irish pockets as it will mean gas prices will increase yet again.
Speaking about the inevitable increase, Mr Martin ruled out the possibility of the once off €200 electricity credit, which will be paid to every household in Ireland in March and April, being extended to gas providers to lessen the burden on customers.
He said: "I think more broadly the crisis will have a negative impact on oil prices.
"There's a number of factors that have come into play here. Obviously, the geopolitical crisis is one," Mr Martin told the Irish media in Berlin.
"All the economies simultaneously rebounding from Covid is another, so there's been high demand all over the world in respect of energy.
"Combine it all, and you - we're - in a very serious situation which could get worse now because of what happened yesterday."
The Taoiseach said all sanctions placed on Russia would have impacts and that the whole situation is the "last thing that the world needs".
He said: "Sanctions will have greater impacts on some countries than others, and there's no getting away from that."
Mr Martin also ruled out a delay in the increase of carbon tax, saying the hikes are already legislated.
He said: "No, they will not be paused.
"The carbon taxes are going back to the people in the form of retrofitting grants, farming grants, and they protect people from fuel poverty.
"They are not the big issue, and they represent only a very small amount of the huge increases that have occurred in the recent months."
The Taoiseach warned that "chasing" inflation would be "self-defeating" and that further measures to help with the cost of living will be decided at Budget time in October of this year.
