Taoiseach calls on energy companies to pass on fuel price reductions to consumers

Taoiseach Leo Varadkar has urged energy companies to pass on reductions in fuel prices to consumers, but he said that the Government has yet to decide on whether to introduce home heating credits in this year’s budget as happened last year.

“It is good that we are seeing the price of petrol and diesel fall – but we have not yet seen the price of electricity and natural gas fall for businesses and householders [though] I do anticipate that will happen,” said Mr Varadkar.

“What happens is the retailers, those who sell gas and electricity to homeowners and businesses, they did not pass on all of the wholesale increase so there will have to be a time-lag until they see that being passed on with wholesale prices falling.”

“But I do expect it to happen – and we are saying very clearly to electricity companies and the gas companies that we are not going to allow a situation whereby they record bumper profits and do not bring down prices.”

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Speaking in Cork where he was briefed on the €700 million investment in Irish wind energy by Danish firm, Ørsted, which now operates 19 wind farms here, Mr Varadkar said he was conscious of the impact of high fuel prices on families, and he pointed out the Government could intervene in three ways.

“One is by putting pressure on those companies to bring down their prices so that electricity and gas prices come down for businesses and householders but also we are imposing a windfall tax on the profits of energy companies, and we are also taking a special dividend from the ESB.”

Mr Varadkar said that the money obtained from the special dividend from the ESB could be given back to businesses and householders through energy credits, but he stressed that the Government had made no decision on whether energy credits should be extended into this winter.

“I think that depends on where energy prices go between now and budget day and the wider Budget 2024 package that it will be part of – that is a decision for the budget in October. There aren’t any plans to pay any more over the summer, but it is something we will revisit over the winter period.”

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Meanwhile, Tánaiste Micheál Martin, speaking at the official opening of EirGrid’s new office in Cork city, also addressed the issue of energy companies being tardy in passing on savings from the wholesale energy market to domestic consumers and businesses.

“Look, we do know to be fair, many companies did forward purchase and had higher prices . . . but the fact is that we have had lower prices for a considerable period of time and that should reflect itself in the consumer prices and the prices people are paying at the pump and for home heating.”

Mr Martin said the energy regulation had a role to play in the matter, but he said that energy companies also had “a moral obligation” to ensure that they pass on reductions in wholesale prices to people so that the reduced prices are reflected in the Consumer Price Index.

“We have intervened before as a Government and we are keeping the situation under review and obviously in the budget later in the year, we will take the opportunity to assess it to see if we help people in terms of the pressures that they are under as we did last year, very comprehensively.”

Mr Martin wouldn’t be drawn specifically on whether the Government will again introduce home heating credits but pointed out that last year, the Government took a holistic approach which included reducing payments for general public services, and he envisioned a similar approach this year.

“This September we will deliver a free book scheme for primary schools, so we have in a targeted way sought to reduce expenditure that people would normally have to pay out for such services and we will assess all that again in the context of the budget.

“The budget is some time away, but we will have to assess other items as well in terms of housing, which will obviously feature in our plans in terms of both estimates and budgetary consideration in terms of tax and the broader issue of tax relief and other matters.”