Excise on fuels ‘must be looked at’ as prices rise due to war, Varadkar says

The Government needs to look at excise duties in order to help households with rising energy and fuel prices due to the situation in Ukraine, Tánaiste Leo Varadkar has said.

Mr Varadkar said senior Ministers would meet on Thursday to discuss what may be required to help with rising costs, aside from the €200 electricity credit and €125 lump sum for fuel allowance recipients.

“We’re looking at other ways that we can respond, but we would be dishonest if we didn’t say to people and to businesses that the reason for the increase in price are largely outside of our control,” he told the Dáil during Leader’s Questions.

“The proportion of energy prices that are covered by taxation is actually now falling but we need to look at excise [duties] in particular and see if we might do something there.”

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Mr Varadkar said the situation in Ukraine was "unprecedented" and that Russian president Vladimir Putin had "made a big mistake", and "if anything, he has cemented and strengthened the Ukrainian national identity".

“We came through the shock of a pandemic nobody could have predicted, we thought we were going to enter into a period of relative stability and normality, and Vladimir Putin by his actions has abandoned all of that,” Mr Varadkar said.

“We are now facing another shock in terms of prices and in terms of energy in particular.”

He said Ministers would meet later on Thursday to discuss how Ireland could assist Ukraine in terms of both a political and humanitarian response and there would also be a discussion "on what else we may need to do or be able to do to help households and help businesses and farmers who are going to be affected by the sanctions and the economic disruption caused by the crisis in Ukraine".

Mr Varadkar said Ireland doesn't have a lot of direct trade with Ukraine or Russia, with neither of the State's coal or gas supply coming from the latter, but said there would be "indirect effects" including price rises.

He said he believed that far too many people in the West, including “a lot of Western European governments” had turned “a blind eye to president Putin for too long”.

“We saw that after the Crimea crisis that sent out a message to him [president Putin] that the West was weak and he started making plans I’d say around about then to try and take the rest of Ukraine, but I don’t think it’s just about governments or government ministers,” Mr Varadkar said.

“I think anyone who has expressed pro-Putin sentiments or has been an apologist for Putin, now has questions to answer, and there are a lot of them in Ireland, some in this House and many outside of this House.”

Defence spending

The Tánaiste also said Ireland needed to increase its defence spending, including better pay for military personnel and better equipment.

“We need to be able to guard our own seas. We need to be able to have radar over our own airspace,” he said.

“The assumption that we’ve made for 70 years now is that nobody would attack us because we’re a country that’s neutral militarily. Ukraine was neutral militarily, it wasn’t part of any military alliance.

“It was attacked because it was politically part of the West, or at least wanted to be politically part of the West.

“We make the assumption that even if we are attacked, the British and the Americans will come and save us anyway and I’m not sure that’s the kind of assumption a sovereign country like ours should make.”