Latvian parliament advances another proposal to cut fuel prices

The Saeima's Budget and Finance (Tax) Committee on Tuesday approved, in first reading, amendments to the Energy Law proposed by the Union of Greens and Farmers (ZZS) that would suspend the security reserve service fee on fuel until December 31 this year. The bill has been marked urgent, and the committee will also ask the National Security Committee for an assessment.

ZZS says the fee has stood at 81.26 euros per tonne of oil products since January this year, and scrapping it — if the savings were fully passed on to consumers — could lower fuel prices by roughly eight cents per litre. However, MP Harijs Rokpelnis (ZZS) acknowledged that detailed calculations from the Ministry of Economics suggest the effect would be neither immediate nor complete, adding that the issue has not been fully discussed with relevant security institutions at government level.

Due to lack of quorum, the committee did not manage to review a separate ZZS proposal to cut value-added tax on fuel from 21% to 12% until the end of the year. According to Ministry of Economics estimates, fully passing on such a tax cut could reduce diesel prices by about 15.6 cents and petrol prices by about 14.6 cents per litre, saving a household consuming 100 litres a month roughly 15.6 euros. The measure's impact on the state budget over three months is estimated at 18–20 million euros.

Other measures under discussion

At an earlier session, the committee conceptually backed amendments to the Transport Energy Law that would remove the mandatory biofuel blending requirement, potentially cutting fuel costs for farmers and fishermen by 0.03 to 0.15 euros per litre. If the government approves this solution through Cabinet regulations before the second reading, the bill will not proceed further. An exemption is also planned for diesel used by the National Armed Forces and allied forces.

The bill on scrapping the security reserve fee is scheduled for its first Saeima reading on October 1. Separately, on September 24 lawmakers already adopted amendments that, from October 1, 2026, will further cut excise tax rates on diesel and petrol, expected to lower retail prices by eight cents per litre if fully passed on by fuel retailers.