Lithuania’s cabinet on Friday approved a Finance Ministry proposal to temporarily cut excise duty on diesel in an effort to curb rising fuel prices driven by conflict in the Middle East, with the final decision now resting with parliament.
“The aim is to cushion the price increase,” Finance Minister Kristupas Vaitiekūnas said during a remote government meeting.
The proposed changes would lower the final price of diesel by about 6 cents per litre, including value-added tax (VAT), Vaitiekūnas said. “The total reduction would be about 6 cents,” he added.
He noted that fuel prices have risen sharply amid the ongoing conflict, with diesel seeing steeper increases than petrol.
“Due to the war, both oil prices and especially diesel prices have risen significantly,” Vaitiekūnas said. “Because of a shortage of diesel production capacity in Europe, diesel has become particularly expensive. While petrol prices rose by about 30 cents, diesel has increased by 50 cents or even more.”
According to the minister, the planned excise duty reduction is intended to offset additional revenue collected from higher VAT on fuel.
The proposal applies to both standard diesel and “green” fuel used by farmers.
The Finance Ministry submitted amendments to the Law on Excise Duty in late March, proposing that the reduced rates remain in effect until June 15.
Under the proposal, the fixed components of excise duty would be adjusted, reducing final rates to 503.6 euros per 1,000 litres for standard diesel and 35 euros per 1,000 litres for agricultural diesel.
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