Government to seek ‘flexibilities’ in EU fuel price legislation, Taoiseach says

The government will seek “flexibilities” in EU law that will allow VAT to be further reduced on fuel prices without financial penalties being imposed on the state, Taoiseach Micheál Martin has said.

Speaking as he arrived for a special summit of EU leaders at the Palace of Versailles in France, Mr Martin said the war in Ukraine had had a dramatic impact on energy prices and supply.

The Taoiseach also said it was possible that Irish Defense Force personnel could be deployed at some point around the EU-Ukraine border, on a peacekeeping or enforcement mission. Peace.

The Versailles meeting is hosted by French President Emmanuel Macron and discusses proposals to strengthen the EU’s energy independence as well as its defense capability.

Mr Martin said Ireland had benefited from historic derogations from VAT on fuel prices which allowed it to charge lower rates. However, in a situation where a State varies its rate, it risks losing the exemptions.

The government has already reduced excise duties on petrol by 20 cents per liter and on diesel by 15 cents per liter in response to dramatic increases in fuel prices since the outbreak of the war.

Mr Martin told reporters as he entered the palace grounds that if Ireland reduced VAT further it would lose the waiver and would have to accept a higher rate in future once the situation returned to normal normal.

He said the government was now looking for “flexibilities around this”. Finance Minister Paschal Donohoe was also advocating for this with the European Commission, he added.

The Taoiseach said three key points would be discussed by the 27 EU leaders. “(We will discuss) defense and security investments across Europe, with many member states reconsidering (their positions),” he said.

“The Ukrainian crisis has really changed the world order. Economic resilience and robustness will be a key element of tomorrow’s discussions in terms of key areas where Europe needs to be more resilient.

“New Initiatives”

“We have seen this in healthcare in the context of Covid-19. There are new initiatives in semiconductors, for example, to ensure that Europe is not too vulnerable, in terms of low production levels.

He said the third problem was energy dependency.

“There is a statement that we have been working on, around reducing dependence on Russian gas and oil over time. Obviously, some states are much more dependent on the import of (Russian) gas and oil. I think more strategically, we’ll see a much bigger focus in the medium term, on more renewables, effectively reducing dependencies.

He said the crisis created by the war was a global crisis that had a huge impact on energy prices. Regarding the national impact, he said the government had realized the significant impact of the dramatic escalation in oil and gas prices on the Irish economy.

Asked about the alleged price-fixing by some fuel suppliers in Ireland, he repeated his comments that it was “morally wrong in the context of barbaric warfare”. He said the Competition Authority’s role would be to ensure that there was no price-fixing or that there were no cartels operating.

Asked about the new sanctions imposed by the EU, Mr Martin said this would be done in collaboration with the EU, the United States, Canada and the United Kingdom.

“My rule of thumb is that we should have unity of purpose on this and we should move forward in unison.

“Because it will have the greatest impact in terms of pressure on Russia.”

He said it would be discussed at the meeting, but since it was not a formal council, he did not think a formal decision would be made at Versailles.


Mr Martin said there was huge anger in Ireland over the atrocities in Ukraine. “We pay tribute to the journalists around the world who bring us these photographs and risk their lives to go behind the scenes or to show the war to the people. Because it creates a huge momentum against the Russian Federation and its war against Ukraine. In my view, that in itself will create pressure.

He also praised Mr. Macron for keeping communication channels open with Russian President Vladimir Putin in an effort to end the war.

Mr Martin said that while Ireland was militarily neutral, it did not prevent other member states from helping countries defend their citizens from attack.

Asked about the circumstances under which Irish Defense Force personnel could travel to Ukraine’s borders to help on a humanitarian basis, he said it was “always possible”.

“We are ready to help neighboring countries in terms of humanitarian crisis in terms of logistics along the border,” he said.

Mr Macron said before the meeting that the war had completely changed the architecture of Europe.

“Our democracy and our values ​​have been threatened. We have to accept that sometimes we have to pay the price,” Macron said as he entered the meeting.

“I will spare no effort to achieve this ceasefire,” he said.

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