Lithuania’s parliament on Tuesday approved a temporary reduction in the excise tax on diesel in an effort to curb rising fuel prices driven by conflict in the Middle East, a move expected to lower costs by about 6 cents per litre.
Lawmakers voted 98–0, with two abstentions, to pass amendments to the Excise Duty Law. The measure will remain in effect for two months, until June 15.
The reduction applies to both standard diesel and diesel used in agriculture.
Finance Minister Kristupas Vaitiekūnas said the government initiated the cut because diesel prices have been hit hardest by tensions in global oil and fuel markets linked to the US and Israeli attacks on Iran and its retaliation.
He said the measure was intended to demonstrate state solidarity by temporarily forgoing additional value-added tax revenue in order to soften the impact of rising fuel costs on the economy.
Lawmakers from the opposition raised differing views during the debate. Algirdas Butkevičius of the Democratic Union “For Lithuania” said the tax cut was overdue and would do little to contain inflation, which he noted had risen fastest in Lithuania among eurozone and European Union countries in March.
Meanwhile, fellow party member Kęstutis Mažeika said the move sent a signal to the public and the agricultural sector that the government was acting to address fuel prices, even if broader measures were not yet in place.
“Maybe there is not enough time for broader measures,” Mažeika said during the parliamentary session.
The amendments adjust the fixed components of diesel excise rates, reducing the final tax to 503.6 euros per 1,000 litres for standard diesel and 35 euros per 1,000 litres for agricultural diesel.
Earlier estimates from the Finance Ministry suggested that about 13 million euros in additional value-added tax revenue could be generated over the two-month period and used to offset fuel costs. Deputy Finance Minister Lukas Jakubonis said the government may consider extending the reduced rate if fuel prices do not decline further.
According to the Lithuanian Energy Agency, since March 2, gasoline prices have risen by 30 cents per litre, while diesel prices have increased by 55 cents per litre.
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