Both makes sense. They can set up a welfare program to help the poor if the heating costs go through the roof.
It's better to let the people feel the true price of energy than to shield them against it. They would otherwise never go for more efficiency.
Same problem in Iran; not understanding opportunity costs, oil-rich countries insist that oil ought to be cheap for their consumers - and end up with a horribly inefficient domestic oil consumption.

You need to rein in on this; the medium and long term benefits of letting markets force people into more efficient consumption are huge.


The exchange rate thing is even more important; a weak national currency makes imports and vacations abroad very expensive, but it boosts exports. An artificially strong currency only accumulates problems and pains over time. So far no country has sustained an artificially strong currency for long without showing great distress. Look at Southern Italy; it had an artificially strong currency for decades because its currency union with North Italy, and it never seems to be able to catch up.