Reduction of excise duty on diesel fuel: price drop expected, but not immediately on April 1 - expert

From April 1, the excise tax on diesel fuel is reduced for three months, which theoretically will allow for a price reduction of about 8 cents per liter.

However, drivers are unlikely to notice this reduction at gas stations right away — it will all depend on the turnover of fuel stocks, reports the program "900 seconds" (TV3). The head of the Latvian Fuel Traders Association, Ieva Ligere, explained that the impact of the excise reduction is not instantaneous.

"Tomorrow, fuel exported from the excise warehouse will be 8 cents per liter cheaper," noted Ligere. This means that the new, cheaper fuel will gradually enter the market. "This excise reduction will apply to the fuel that will be exported from the excise warehouse tomorrow."

In response to the question of whether drivers will see a price drop immediately, Ligere stated unequivocally: "The fuel that will be at gas stations tomorrow will still have the full excise tax."

Speaking generally about the impact of rising prices, Ligere noted that businesses are already actively looking for better offers. "In the commercial sector, we observe a trend of migration and searching for a better price."

As for individuals, their behavior has not yet formed: "It is too early to draw conclusions regarding individuals." She added that fluctuations were observed in March — first, demand was higher, then it decreased, and now the situation is stabilizing.

At the same time, the Ministry of Economics proposes to introduce a so-called solidarity payment or tax on excess profits for fuel traders if prices exceed a certain level. Ligere criticized this idea: "We do not support this approach, as we believe it is price regulation."

She compared this initiative to interference with media freedom: "It is like telling the media: there is freedom of speech, but we will monitor it and, if we don’t like it, we will correct it."

In the opinion of traders, the government should use other tools. "Our proposal is to monitor prices and exercise oversight."

Ligere acknowledged that regulatory bodies are already actively monitoring the market. "The Competition Council and the Consumer Rights Protection Center have requested a number of information." According to her, this oversight already provides the necessary control over price formation.

Speaking about the future, Ligere emphasized that prices are largely determined by the exchange, so forecasts about a possible rise in gasoline prices are limited. "It is too early to talk about this now, as prices are tied to the exchanges."

She added that current trends do not indicate a sharp rise in gasoline prices to 2 euros per liter: "The current dynamics of March do not show this."