Every household in Ireland is set to receive three €200 energy credits from the government over the next six months at a cost of €1.2bn
The measure was announced in the Budget on Tuesday by Finance Minister Paschal Donohoe and is aimed at alleviating the impact of spiralling bills on families and individuals.
All energy companies operating in Ireland have increased their rates, some multiple times, over the last year with hard-pressed billpayers paying hundreds more a year in excess charges.
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Electric Ireland, Energia, Airtricity and Flogas are among the companies who have hiked their charges to customers despite posting yearly profits. They all cite the rising costs to them of processing energy because of the war in Ukraine and other economic factors.
To fight this, the Government has agreed and announced the €600 energy credits for all households. Billpayers already received a €200 credit earlier this year with the payment bypassing customers and being applied directly to bills as they came due.
These new credits will work in a similar way and the first energy credit will be applied to bills before Christmas. The other two will be applied to bills early next year before the beginning of summer, spanning the entirety of the expensive winter season.
Tanaiste Leo Varadkar has said this measure is extremely important in tackling the hardship some people are facing over the prospect of heating and lighting their homes this winter.
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“It’s designed to put money back in people’s pockets, to help people in business with the cost of energy and some permanent changes that will help with the cost of living in the long term,” he said.
The average annual electricity bill in Ireland is close to €2,000 a year so the energy credits announced today are the equivalent of a 30% reduction for customers. This is somewhat tempered by the fact that energy companies have hiked those bills by a similar percentage in recent years.
This news comes after Taoiseach Micheal Martin said soaring energy prices are largely out of governments' control. He was speaking after Flogas hiked prices by 17% for electricity and 23% for gas just last week.
He said: “In terms of Flogas, again, the future pricing is out of our control in terms of what is happening in terms of the wholesale markets.
“And as I’ve said in the Dáil repeatedly, the cost now per therm compared to what the cost of what it would have been two or three years ago is dramatic, up to nine or ten times more expensive now.
“What we have to do, what the European Union is doing, is working on the market, to see if we can decouple gas from renewables - it’s complex.
“And also looking at the windfall gains that energy companies have made so that that can come back to the Exchequer in terms of using it to alleviate pressures.
“But the fundamental approach we’re taking now is to alleviate the pressures on households, on families and on businesses as well and to try and protect jobs. That’s the key agenda.”
The energy credit step is the government's way of alleviating that pressure but people are pushing for further support with bills likely to increase further as we move into 2023.
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