Starting April 1, a three-month period established by the law passed last week to limit the rise in fuel prices began, during which the excise tax rate on diesel fuel was reduced by 15%, writes Latvijas Avīze.
Until June 30, the excise tax on diesel fuel will be €396 per 1000 liters, while the standard rate is €467, and for marked diesel fuel used in agriculture, it is €21 per 1000 liters (the standard rate is €70.05). For the average consumer of diesel fuel, these changes mean a decrease of about 9 cents per liter.
Already on March 31, the day before the changes, prices at gas stations slightly fell. For example, at the "Circle K Latvia" gas station, the price of diesel fuel dropped by 7 cents on Tuesday, reaching €2.064 per liter. On Wednesday, the decrease was less noticeable: at the "Circle K" gas station, the price fell by another 2 cents, achieving a total reduction of 9 cents over two days (€2.044 per liter), however, at the "Neste" gas station, after the decrease on Tuesday, April 1, the price of diesel fuel returned to Monday's level (€2.117 per liter).
"Retail fuel prices are directly linked to the purchase price, and the reduced excise applies only to the fuel that traders purchased from suppliers starting April 1. The tax reduction does not apply to fuel stocks purchased earlier. As a result, the price decrease due to the change in the excise rate will manifest gradually as new supplies enter the market," explains Janis Viba, chairman of the board of the gas station network "Virši-A."
He also added that simultaneously on April 1, a requirement for the mandatory addition of a bio-component to fuel came into effect, which creates a slight additional increase in costs and partially "eats up" the effect of the excise reduction.
The reduction of the excise tax on diesel fuel for three months was introduced to mitigate the consequences of the sharp rise in fuel prices in March, caused by the crisis in the Middle East. Last month, the exchange price of diesel fuel rose by about 70%, and the price of Brent crude oil increased by 44%. In Latvia, the average retail price of diesel fuel rose from €1.504 per liter in January-February to €2.13 per liter, an increase of 63 cents.
The rise in fuel prices significantly affects transport, logistics, and other sectors, causing further increases in the prices of goods and services. In agriculture, the spike in fuel prices coincided with the start of spring work, which is a critical period for farmers. Considering that an average of 100 liters of fuel is required to process one hectare during the season, this means an increase in costs of €50 per hectare.
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