After Saudi Arabia was forced to shut down an oil pipeline following a Houthi attack, global oil prices reached 110 dollars per barrel, placing additional pressure on already high fuel prices in Lithuania.
Diesel prices in Lithuania have exceeded two euros per liter since August, and the price of gasoline is also continuing to rise. The government has decided to take action to alleviate the burden on households and businesses but has not yet provided details on the planned measures.
The price hike is becoming increasingly painful for motorists. Vytautas, a driver interviewed by LRT, said the “pain isn’t fatal,” but it is certainly no pleasure either; he would like to see fuel prices drop. Another driver criticized the government for its inaction, noting that it had previously stated that a price exceeding two euros per liter would trigger intervention. He mentioned having seen diesel priced at 2.30 euros per liter, describing the situation as terrible for the public. Lithuanian Energy Minister Lukas Savickas stated that a potential trigger for cutting fuel taxes could be a rise in the average price of diesel—specifically, if the price exceeds 2.20 euros per liter for five consecutive days. This could serve as the benchmark for implementing an excise duty reduction. The minister noted that the Ministry of Finance is preparing a proposal, though no further details have been provided so far.
Lithuanian Finance Minister Taurimas Valys said last week that the government had promised to take action if the price of oil remained above 100 dollars per barrel for at least five consecutive days. At that time, the price had been at that level for only two days, and the minister said it was necessary to wait.
However,
the price of oil has now been above 100 dollars per barrel since the 9th of September.
The average price of gasoline in Lithuania is 1.90 euros per liter, while the price of diesel is around 2.18 euros per liter. Agnė Bagočiūtė, Director of the Lithuanian Energy Agency, pointed out that the average price of diesel has been at least 2.00 euros per liter for 20 consecutive days and the price of gasoline is rapidly approaching this level as well, suggesting that measures need to be introduced. Oil prices have risen in response to the closure of a Saudi Arabian oil pipeline that was attacked by Houthi rebels on the 11th of September. It served as a crucial alternative route for oil from the Persian Gulf region while the Strait of Hormuz remains closed. The Orlen Lietuva refinery also purchased oil transported via this Saudi pipeline.
Savickas stated that, despite the price hike, Lithuania faces no immediate risk of a fuel shortage. He emphasized the importance of distinguishing between supply security and prices; while fuel supplies are currently sufficient, the issue of pricing is a separate matter.
Read the full article in English here: https://www.lrt.lt/en/news-in-english/19/3053077/lithuania-weighs-fuel-tax-cuts-as-middle-east-tensions-push-oil-prices-higher
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