The Saeima Budget and Finance (Tax) Committee on Tuesday approved for the first reading amendments to the Energy Law drafted by the Union of Greens and Farmers (ZZS), which would temporarily suspend the security reserve service fee on fuel.
The bill has been designated as urgent, while the Saeima Budget Committee will also ask the National Security Committee to assess the proposal.
The proposal would suspend the security reserve service fee on fuel until 31 December this year. ZZS notes that since the 1st of January this year, the fee has been set at 81.26 euros per tonne of petroleum products. According to the party’s estimates, if the fee were abolished and the full reduction passed on to consumers, fuel prices could fall by approximately eight cents per litre.
At the same time, the committee did not manage to consider another ZZS proposal to reduce the value-added tax (VAT) rate on fuel from 21% to 12% until the end of this year.
Saeima MP Harijs Rokpelnis (ZZS) told LETA that
consideration of the proposal was postponed due to a lack of quorum.
He said this was the result of poor planning and also reflected a clear reluctance to address the VAT issue. In his view, however, suspending the security reserve service fee could have a positive effect on fuel prices.
“However, the views on this are contradictory. Now that we have received more detailed information and calculations from the Ministry of Economics, we conclude that these effects will not be immediate or complete,” Rokpelnis acknowledged.
He added that the government has not fully discussed the matter with the responsible security institutions. The committee therefore decided to request an opinion from the National Security Committee, as the country should not “voluntarily play around” with its strategic reserves.
The bill is scheduled to be considered by the Saeima in its first reading on Thursday, the 1st of October.
As previously reported by LETA, ZZS proposed three measures aimed at reducing fuel prices for residents, farmers and businesses.
In addition to the proposal to suspend the security reserve service fee, the committee on 23 September conceptually approved for the first reading amendments to the Transport Energy Law that would remove the requirement to blend biofuel into fuel as a way of reducing prices.
At the same time, the committee decided that if the government approves Cabinet regulations providing for such a solution before the bill is considered in its second reading, the legislation will not proceed to a second reading.
According to estimates by the authors of the amendments to the Transport Energy Law, the measure could reduce fuel costs for farmers and fishermen by between 0.03 and 0.15 euros per litre.
An exemption from the mandatory biofuel blending requirement is also planned for certain diesel fuel
intended for the needs of the National Armed Forces and allied forces, allowing it to be stored for extended periods and used in military equipment.
ZZS has also proposed reducing the VAT rate on fuel from 21% to 12% until the end of this year. According to calculations by the Ministry of Economics, if the tax reduction were fully passed on to retail prices, diesel could become approximately 15.6 cents per litre cheaper, while petrol could fall by around 14.6 cents per litre.
According to the party, a household consuming 100 litres of fuel per month could save approximately 15.6 euros a month under such a measure. At the same time, Ministry of Economics calculations indicate that the measure would cost the state budget approximately 18–20 million euros over three months.
LETA previously reported that on the 24th of September this year, Saeima MPs adopted amendments to the Law on Limiting the Increase in Petroleum Product Prices, providing for a further reduction in the excise duty rate on diesel as well as a reduction in the excise duty rate on petrol.
The amendments will enter into force on the 1st of October, 2026.
Retail prices for diesel and petrol are expected to fall by eight cents per litre if fuel retailers pass the full tax reduction on to consumers.
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