Workers and families face a cost-of-living crisis that demands an urgent response. Last week, Energia became the third energy supplier this year to announce a price increase for its customers. The increase will come into effect next month and will add €427 to the yearly household bill. This is the fourth price hike announced by Energia in the past year and it comes just a week after Bord Gáis announced a massive price increase that will add €775 to the yearly household bills of its customers. These are frightening numbers and they come after 35 energy price hikes announced last year. Without action, low- and middle-income households face an income squeeze that they will struggle to withstand and, indeed, many are already unable to cope. The Society of St. Vincent de Paul has seen requests for help soar, with households facing an impossible and unacceptable choice between keeping the heating on and doing the weekly food shop.

Last week, the Central Bank told an Teachta Pearse Doherty that households would see energy and food costs rise by €1,900 this year. Workers and families cannot bear these costs without very significant financial hardship. They need help. We recognise the causes of this cost-of-living crisis and we know that households cannot be fully insulated from these costs, but they can and they must be supported as much as possible. The good news is that more can be done. Indeed, the responsibility of the Government is to ensure that more is done. Caithfear níos mó tacaíochta a thabhairt do theaghlaigh. Is féidir níos mó a dhéanamh agus is é cúram an Rialtais cinntiú go ndéantar níos mó. Táimid tar éis insint don Taoiseach cad is féidir a dhéanamh.

For five months now, we in Sinn Féin have been calling on the Government and the Minister for Finance to work with the European Commission to remove VAT from household energy bills, and for months that proposal has been dismissed. I welcome the fact that the Taoiseach has now changed position and that he is now, finally, engaging with the Commission to allow for a reduction or a removal in the level of VAT applied to fuels, just as we have been calling for. The conclusions published after the meeting of the European Council last week provide scope to engage with the Commission further on the issue of VAT.

What specific ask has the Taoiseach made of the Commission? Has he sought scope for the Government to reduce VAT on domestic energy bills to zero for a period of time, as we have asked? Has the Government applied for a derogation from the current VAT rules? When does the Taoiseach expect this process to be concluded so customers can get the break they need?

The Government could take measures now to reduce the cost of home heating oil for hundreds of thousands of households. This month the cost of filling a tank rose to more than €1,600. Many households cannot afford this. We in Sinn Féin have called on the Taoiseach to remove excise duty on home heating oil. Up to now he has ruled this out but, given the pressure so many workers and families are under, will he change his position and provide them with additional support by removing excise duty from home heating oil?

I thank the Deputy, all Members of the House and many well-wishers for their kind remarks in the aftermath of my brush with Covid. Thankfully, it was a light brush and probably points to the value of vaccination. I urge anybody who is not vaccinated to get the booster.

There is no doubt that there has been a severe increase in the cost of living in recent months. As we emerged from Covid we had an initial inflationary cycle which was described by the Central Bank as a pandemic cycle of inflation because of the imbalance between supply and demand. There was huge demand as people and societies emerged from Covid. Economies rebounded, supply chains were under strain, manufacturing could not keep up with the demand and prices rose.

Prior to the war on Ukraine, the energy market was being manipulated, in our view, to create spikes in prices and challenges around energy. There is no doubt that the energy question is being leveraged by the Russian Federation in respect of the conduct of the war. The war itself is significantly adding to and making worse the inflationary pressures on our economy, particularly on households and people generally. That is across the board, particularly in energy, but it will be manifested in food and other commodities, particularly certain metals. Russia and Ukraine account for about 30% of global exports of wheat, 7% of maize and more than 50% of sunflower seed oil. Together they produce 12% of calories consumed globally. Ukraine supplies about a quarter of the European Union's cereal and vegetable oil imports.

There will be ongoing impacts from the war, over and above what we have witnessed to date. Transport routes have been disrupted because of the war so the cost of trade is increasing. For example, rail freight between Asia and Europe via Russia or Ukraine is interrupted. Trade has switched to sea freight, which is slower and more costly. Sea freight routes through the Black Sea are affected. The annual rate of inflation in Ireland rose to 5.7% in February. Euro area inflation was 5.8%. Wholesale oil prices are up 40% compared to January, on average, and gas prices are up 60%. The cost of base metals and agricultural commodities has also surged. A barrel of oil costs $114 today on international markets, up from $96 on 23 February. UK natural gas on wholesale markets is trading at around £2.45 per therm today. This day last year a therm of gas cost 47p. Wages went up 4.7% in 2021, following a rise of 5.2% in 2020.

This dramatic and phenomenal increase in prices is having impacts. The Government has, from the budget on, produced close to €2 billion in income supports and targeted measures around energy, in particular, and other areas through welfare payments, in response to the increase in inflation.

We have also targeted measures for hauliers, tillage farmers and the pigmeat sector and we are looking at other sectors. Regarding the EU, we sought an amendment to the conclusions to create the opportunity for flexibility around the VAT and energy tax directives, which restrict us now. We were not ignoring anything. We simply pointed out at the time that what Sinn Féin was asking for could not be done then because of the regulations. We do not want to go back to 23% in respect of oil once this crisis is over. On home heating-----

We are over time.

In essence, Deputy McDonald is saying we should reduce the carbon tax. Let us call a spade a spade. There is VAT and carbon tax on home heating oil.

The Taoiseach has described the problem and accurately signposted that it will be an ongoing problem, so the pressure households are under will remain constant. The Taoiseach must recognise, as I am sure he does, the struggle that means for households and families right across the State. The Taoiseach did not answer a series of very straightforward questions. On the issue of home heating oil, we want the excise duty removed from it.

Is the Deputy referring to the carbon tax?

Yes, which is an excise charge on-----

The Deputy needs to be honest about saying that.

Revenue describes it as an excise.

It is-----

I do not care what it is called.

It is-----

I do not care what it is described as. It needs to be removed.

Well, the Deputy needs to be transparent.

It needs to be removed.

It is the cost of living.

Will the Taoiseach remove the excise from home heating oil? That is the question. I believe the Government should do that and do it urgently to give relief to those who cannot now fill their tanks and are struggling. I also asked the Taoiseach what specific request was made of the European Commission. Have we sought a derogation in respect of the VAT directives? How long will this process take? What ask has been made? As the Taoiseach is aware, we believe we should look for a zero rate for a defined period of time. Is that what has been sought?

The Deputy knows that is what I sought. I said that to her already. We have sought a derogation in respect of the application of the rules around the VAT directive and the energy tax directive, which covers excise. Basically, we have sought that if we reduce our VAT rate, because we have an historical derogation already in this regard and already have one of the lower VAT rates on energy now, of 13.5%-----

To what level?

If we bring that down-----

To zero?

No, I do not think we should go to zero. If we did bring the rate down, we would go back up to 23% under the existing rules.

Change the existing rules.

I have been saying this to Deputy McDonald for two or three months and so has the Minister for Finance.

I am not stupid. I am aware of that. Answer the questions.

The Deputy is well aware of it, but she should know that. Therefore, we have been seeking from the European Commission-----

What?

-----a change in the application of those rules and a temporary derogation from those rules so we could give ourselves and other states flexibility in respect of the application of VAT, or, indeed, excise duties. Turning to home heating oil, carbon tax is there now, with VAT. Those are the two options. The Deputy is technically using different terms, deliberately to-----

Revenue uses that term.

Politically, the Deputy wishes to avoid the charge that she wishes to get rid of the carbon tax.

I am avoiding nothing.

That is what it means. That said, we want flexibility on the VAT side, obviously.

I used the language the Revenue used.

We are over time.

The Deputy is right to say that this is going to go right through to the end of the year, and that is how the Government must react here. We cannot be bringing in separate measures every week.

I thank the Taoiseach. We are moving on.

We have to prepare for the medium term in terms of helping to manage the economy properly.

It is not fair-----