Discussions to possibly double the electricity rebate from €100 to €200 are said to be ongoing tonight ahead of a Government announcement tomorrow.

An extension of the 28-week period in which the €33 weekly Fuel Allowance is paid is also under consideration.

Taoiseach Micheál Martin told a meeting of his party that Government will take measures tomorrow to alleviate pressures on working people and those on low income.

He said all measures would be aligned with Government policies and strategies as inflation is having a real impact.

It comes after Tánaiste and Minister for Enterprise said there will be a universal element to the package of measures the Government is working on to address the rising cost of living so that all households benefit.

But Leo Varadkar said there will also be a targeted element to it as well, to assist people on fixed incomes and social welfare.

"It is important to acknowledge that middle income people - people who on paper may have average salaries of €40-50,000 - are also struggling to pay the bills, because often they have to pay mortgages, childcare, all those things," he said.

"So it is important that we have a universal element to it. It is also important that we have a targeted element to it as well," Mr Varadkar said.

The Tánaiste said it is likely that details of the measures will be announced tomorrow evening, after the Cabinet's economic subcommittee has met.

Speaking to reporters in Dublin, Mr Varadkar said the cost of living is rising and people are really feeling it in the cost of groceries, filling a tank of petrol or diesel and particularly in their electricity and gas bills.

"This is very much a burning issue for politicians and for the public at the moment," he said.

He added that while the cost of living is rising at around 5% a year, depending on a person's individual experience it can be a lot worse than that.

"Very few people are actually average and if you are someone who is paying rent as opposed to owning their own home, if you are someone who commutes long distance, if you are someone who has a family to look after rather than no kids or grown up kids, that experience can be quite different," he said.

Mr Varadkar said the Government did take action in the Budget, with a tax and welfare and pension package, as well as a freeze on childcare fees, and other actions.

He said the Government can treat a lot of the symptoms of the problem by helping to reduce Government influenced charges and by putting more money in people's pockets.

But he also said that only treats the symptoms and the underlying causes also need to be treated.

"That means dealing with capacity constraints that exist within our economy, it also means incomes policy and it also means monetary policy," he said.

The Tánaiste said it could be the case that inflation is going to be a feature of life in Ireland and in Europe and around the world for a number of years.

If that is the case he said we need an anti-inflation strategy that is not just about dealing with the symptoms but actually deals with with the underlying causes, including supply chains, infrastructural capacity constraints, monetary policy and incomes policy.

He added that he does not think the inflation issue will impact negatively on Ireland’s competitiveness, as it is a problem all across the globe.

Minister for Finance Paschal Donohoe said the Government is very aware of the need to get the balance right in responding back to the rising cost of living but at the same time not putting in place measures that will make things worse.

"We are aware of the risk and any plans we bring forward will get the balance right," Mr Donohoe said.

He said the approach of Government has been to make the measures targeted and once off.

Pipeline of new homes cannot happen fast enough - Varadkar

The Tánaiste also said the pipeline of new homes is coming through, but just can not happen fast enough.

Mr Varadkar said the issue of rising house and rent prices is not something new and has been there for a number of years now.

He said the issue is a potential barrier to further economic growth and development.

But despite this, he said last year was a record year for IDA Ireland and Enterprise Ireland job creation.

He said it is certainly the case that the population has grown so much and the economy has grown so fast that we are facing serious infrastructural constraints, a housing shortage, the need for very significant investment in electricity, public transport and water services for example.

But he added that it is not like the Government only recognised this in last year or two - it has been aware of it for quite some time.

"That is why it is "ramping up capital spending", he claimed.

Mr Varadkar said Ireland is now above the European average on infrastructural investment after a period of being a low investor due to the economic and financial crisis.

The Tánaiste said it will take time to show an effect, but he added that he is encouraged by a very significant increase in the number of new house starts, with over 20,00 new homes built last year and 30,000 new commencements in the same period.

"So you can see that pipeline coming through - it just can't happen fast enough," he said.

Additional reporting Will Goodbody