Fuel prices may stay high for a while longer – Economy Ministry outlines further plans

Fuel prices across the Baltic states continue to be shaped by instability in the Middle East and related disruptions to oil supplies through the Strait of Hormuz. Amid ongoing uncertainty in global oil markets, both Latvia and Lithuania have taken measures since spring to soften the impact of rising prices.

Lithuania's response

Lithuania acted in spring, temporarily cutting the fixed excise duty component for diesel and for marked agricultural diesel, while also suspending a previously planned excise increase. Lithuania's Finance Ministry estimates this lowered fuel prices for drivers by roughly 6 cents per litre, with the resulting budget shortfall partly offset by higher VAT revenue from pricier fuel. Lithuania's prime minister has said the government hopes the price rise proves temporary, but additional measures — including another cut to diesel excise duty — are being considered if high prices persist.

Latvia's measures

Latvia's Economy Ministry says action began as the situation first escalated. A special law took effect in late March, cutting excise duty on diesel and marked diesel; the reduced rate was initially set to run until the end of June but was extended over the summer through the end of the year. The ministry also regularly prepares market monitoring reports for the government and, since April, has run a public tool that tracks daily changes in oil and fuel prices on European exchanges and in Latvian retail.

The ministry has additionally prepared a report on possible response scenarios should the Middle East crisis deepen, and has submitted a bill to parliament that would require fuel retailers to make a solidarity payment if their prices exceed a calculated reference level without justification. The ministry says it will keep monitoring global oil markets and propose further support measures if necessary.