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drop the prices

Varadkar says windfall tax is coming and calls on energy companies to drop their prices

The Taoiseach says Government won’t just be using ‘politie encouragement’ to get prices down.

TAOISEACH LEO VARADKAR has said the Government expects energy companies to reduce their prices in the coming months.

Speaking during Leaders’ Questions, he said “it is not just be about polite encouragement”, stating that the windfall tax will soon be legislated for. 

Last year, Cabinet signed off on the windfall tax which is set to collect the excessive windfall profits from electricity companies that have taken in large amounts of revenue in 2022 and this year. 

While the mechanism is yet to be set out, the revenue will be collected and used to support consumers facing expensive bills.

Households struggling

Varadkar acknowledged that customers are facing high electricity and gas bills, and as a result of that a lot of households are struggling, particularly pensioner and low-income households.

“I meet people, including individual homeowners and business people who show me their bills, and it has been a real shock for a lot of people. In many ways a lot of those big electricity and gas bills have only been arriving in recent weeks.

“In the run-up to Christmas and around Christmas, people though it might not be so bad, and then the winter bills started arriving in January and February and people got a big shock,” he said. 

While he said it is welcome that two companies have so far announced price reductions – Pinergy reducing prices for retail customers and Electric Ireland dropping prices for all business customers, Varadkar said it is “nowhere near enough”.

“Wholesale prices are coming down and I understand that there is a lag between those prices coming down and retail prices for homeowners and businesses coming down. I get that but it should not be too much of a lag.

“It only took a few months for prices to go up so it should only take a few months for prices to go down. We expect to see electricity and gas companies reduce their prices over the course of the coming months for businesses and residential customers,” he said.

‘Not about polite encouragement’

“It will not just be about polite encouragement; there is a windfall tax coming and that will be legislated for in this House and in the Seanad,” said the Taoiseach. 

The windfall tax will recoup some of the profits and give them back to people in the form of reductions in bills, said Varadkar. 

“We have to work out the exact mechanisms around that and that is what we intend to do. We will also be saying to State-owned companies that if they make hyper profits we have the power to take some of those off them in the form of a special dividend and use that money to help people as well,” he said. 

Labour’s Ivana Bacik said her office has been inundated with correspondence from householders and small business owners who cannot pay their energy bills. 

Labour representatives have been hearing from pensioners who have had to resort to taking out credit union loans just to meet the cost of their energy bills, said Bacik. 

Earlier today, Business Minister Simon Coveney said “an explanation is needed” from Electric Ireland as to why it is reducing bills for businesses but not for household customers. 

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