The Government is planning to introduce a windfall tax on energy companies, but the Taoiseach said it is still unclear how much money the levy will raise.

Micheál Martin has said it was "difficult to be precise on the exact amount" of money that may be forthcoming to Ireland as a result of European Commission proposals to cap energy prices and tax profits.

"It very much depends on the ultimate formula that the EU Council of Energy Ministers will arrive at but there will be a stream of revenue from it," Mr Martin said.

"We were never going to be dependent on that revenue stream as the key to the package that we will be introducing in the next two weeks."

The Taoiseach said that "the real firepower" to deliver in the upcoming Budget and "to enable us to get through the first phase of this crisis" was the surplus.

"The revenue from that measure that Europe will introduce can be helpful in the medium term," he said, speaking at the opening of a Penneys store in Tallaght in Dublin.

Mr Martin also noted that a windfall tax would be for "wind generation companies" as well as those engaged in fossil fuel extraction.

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Speaking in the Dáil during Leader Questions today Tánaiste Leo Varadkar the windfall energy tax will form part of the Budget later this month.

He told the Dáil that any tax would be on companies' profits for the full year of 2022.

However, he said that EU's proposals on a windfall tax are not yet agreed and "aren't entirely clear, quite frankly".

The Government would use the money raised from windfall taxes on energy companies to "help families and businesses," he said.

The Budget would see the Government reduce income taxes, increase pensions and other welfare payments, he said.

Mr Varadkar was responding to Catherine Murphy, co-leader of the Social Democrats, who said that the energy companies were engaged in "obscene profiteering".

She added that energy prices were "obliterating the incomes of workers and threatening the survival of businesses".

Rural Independent TD Mattie McGrath said the Government's focus on energy credits was too narrow and disjointed.

He called for the carbon tax to be axed until the energy crisis ends.

Mr Varadkar said Government had acted to help households with the cost of living.

He said the Budget would do this again and it will include a tax package, pension increases and help for people to pay energy bills.

The Tánaiste said the Government is not opposed to bringing more gas ashore from the Corrib gas field if there is more there.

Earlier Sinn Féin TD Matt Carthy said Irish workers were already "stretched" before recent cost of living increases, with high rent and expensive childcare among the issues.

He said the Government's response has been one of acting too slowly and not going far enough.

"What we want to see is energy costs reduced to the level they were at in summer 2021 and be capped at that rate," he said on RTÉ's Today with Claire Byrne.

He said every household is "by and large under severe pressure" along with highlighting more potential rises causing further anguish.

"Somebody has to bear the burden, it will either be ordinary workers and families or the state steps in," he said.

Additional reporting: David Murphy and Mícheál Lehane