Lithuania’s prime minister said Tuesday that fuel price caps could be considered to curb rising prices, but the country’s finance minister warned such a move would be short-sighted and ill-advised.
Prime Minister Inga Ruginienė said the government may examine possible measures to limit the impact of higher fuel costs on consumers.
Finance Minister Kristupas Vaitiekūnas, however, argued that price caps would interfere with market mechanisms.
“What kind of price caps can there be in a free market?” Vaitiekūnas told reporters in Brussels. “Prices are rising in global markets, there are fuel producers who need to earn a profit margin, and fuel sellers. If the state subsidises this, it might be possible, but that would be a very short-term and short-sighted solution. That would be a very bad decision.”
Oil prices have surged following the US and Israeli attacks on Iran, prompting some European governments to consider intervention to curb the costs.
On Monday, the governments of Hungary and Croatia announced they would introduce fuel price caps at petrol stations starting Tuesday.
Vaitiekūnas said the global oil market situation remains volatile and decisions should not be rushed.
He added that if the conflict in the Middle East continues and oil and gas prices remain high, Lithuania could consider reducing fuel excise duties, particularly for sectors heavily dependent on fossil fuels.
Earlier Tuesday, Ruginienė said price caps were one of the options the government could examine to mitigate rising fuel prices and that she plans to discuss the issue with the finance minister.
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