Taoiseach Leo Varadkar has indicated that further energy supports could be on the way for customers when the windfall tax is introduced.
He has vowed to “put pressure” on companies to bring down their prices, stating that they must fall this year.
Writing in the Irish Independent, Maarten Verwey, the European Commission’s director general for economic and financial affairs, warned that states must start to wind back energy support as it could have “serious consequences” as interest rates rise.
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There is also fear that the supports could push up prices.
Speaking in Washington, Mr Varadkar said that the comments from the European Commission will not “change our plans” in Ireland to use a windfall tax to provide further energy supports.
It is anticipated that energy companies will have to pay “hundreds of millions” when the Government introduces the tax on their excess profits.
The Taoiseach said: “People, families, households are really struggling with the cost of energy and the Government understands that.
“Of course, we understand where the European Commission is coming from. We hear what the economists are saying that if you put money back into the economy and into society well then you might just push up inflation higher.
“We understand it’s always the way that if you use any medicine there’s going to be side effects but we have to look at things in the round.
“We believe it is still appropriate that we help people with their bills, particularly those struggling the most like pensioners, people on fixed incomes and small businesses.
“What we’ve announced is going to happen and it is still our intention to use the proceeds of the windfall tax to bring down energy bills.
“And we’re going to put the pressure on the energy companies to bring down their prices as well because we should see those fall this year, not next year.”
The Taoiseach’s comments come as the final €200 energy credit announced as part of September’s Budget is applied to bills for the March/April cycle. The Government decided against further credits when it announced its spring cost of living measures in February.
The Government signed off on a windfall tax in September that will cap market revenues for energy companies.
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