The Government is working on a social welfare package to help consumers offset the rising energy prices faced by households, Tánaiste Leo Varadkar has told the Dáil.

Opposition parties raised the additional financial pressure faced by families this winter as providers announced increased charges following rising commodities prices.

"What we can do is a welfare package in the Budget, helping those on fixed incomes, action on the fuel allowance, pay increases where they can be afforded and it is important that they happen," the Tánaiste told the Dáil.

"And also, a tax package to make sure people retain those pay increases and they don't lose most of them in USC, income tax and PRSI."

Mr Varadkar said the cost of a fill of home heating oil had risen from €450 this time last year to €700 now.

He said rising commodity prices have fed through to the price of electricity.

He said that the energy regulator could not reduce the price of oil on international markets.

Mr Varadkar said gas prices had been rising since 2021 and that high energy prices could last for six months or longer.

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He was responding to Independent TD Mattie McGrath, who said price rises faced by householders were "unsustainable".

"Irish Families are facing the prospect of paying €400 more for their electricity and heating this winter, due to the soaring cost of energy," Deputy McGrath said.

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Labour Leader Alan Kelly warned the Government that it was "facing a winter of discontent" unless it "really acts" on the dramatic increases in the cost of living.

Deputy Kelly said those on social welfare face "a very worrying winter" and there have been "multiple warnings" about blackouts – in part, due to data centre electricity consumption.

The Labour leader said the increases in the fuel allowance last year have already been "eaten up" by recent increases in electricity and gas bills.

"Lots of families are worried about heating the homes," he said.

Additional reporting by Paul Cunningham