The interaction of charges in dielectric materials is screened by the dielectric constant of the bulk dielectric. In dielectric theories, screening is assigned to the surface charge appearing from preferential orientations of dipoles along the local field in the interface. For liquid dielectrics, such interfacial orientations are affected by the interfacial structure characterized by a separate interfacial dielectric susceptibility. We argue that dielectric properties of polar liquids should be characterized by two distinct susceptibilities responsible for local response (solvation) and long-range response (dielectric screening). We develop a microscopic model of screening showing that the standard bulk dielectric constant is responsible for screening at large distances. The potential of mean force between ions in polar liquids becomes oscillatory at short distances. Oscillations arise from the coupling of the collective longitudinal excitations of the dipoles in the bulk with the interfacial structure of the liquid around the solutes.