McGrath: Energy companies have not given reason for why prices remain high

Finance Minister Michael McGrath said he understood the complexities around how companies purchased energy and that there was a lag in the 'pass-through' of price decreases, but he warned this adjustment was taking too long in Ireland.

Energy companies in Ireland have failed to provide an adequate explanation why consumer prices are not falling in response to a dramatic reduction in wholesale costs, the Finance Minister has said.

Michael McGrath said he understood the complexities around how companies purchased energy and that there was a lag in the "pass-through" of price decreases, but he warned this adjustment was taking too long in Ireland.

He was responding to a call from Sinn Féin's Pearse Doherty for the Government to support an investigation by the Commission for Regulation of Utilities into the pricing issue.

Mr Doherty said in the year to March, consumer energy prices rose by 72% while wholesale costs decreased by 50% in the same period.

"Families, customers, businesses are being fleeced," he said to Mr McGrath during leaders questions. 

Mr McGrath said: "It is my view that we have not to date had an adequate explanation for the delay in the pass-through of those reductions.

"We all understand there is complexity. We understand there is a lag, we understand futures contracts and hedging instruments that commercial companies enter into.

That said, there is undoubtedly scope over the weeks and the months ahead now for the energy companies to reduce the prices that consumers are being charged."

The minister said the Government does not have a role in setting prices.

"But we of course have responsibility in terms of the overall environment within which these prices are being set," he said.

"We absolutely have an obligation to call out where we see it that there is a justification for a greater pass-through to the consumers at a retail level of the dramatic reductions that there have been at wholesale level.

"I've no doubt that they will come but they need to come quickly because it shouldn't fall on taxpayers to be stepping in and supporting households who are paying higher prices than the market justifies at this time."