Valainis urges government to prepare in advance for possible support measures due to fuel price hike

Economics Minister Viktors Valainis (ZZS) has addressed the Cabinet of Ministers, urging them to start preparatory work for activating possible support measures related to the increase in fuel prices. In a letter sent on Monday, July 27, the minister notes that the situation in the fuel market is becoming increasingly volatile. The rapid rise in oil and petroleum product prices on global markets has reignited an upward trend, while high geopolitical uncertainty poses a risk of further price increases.

Valainis calls on the government to identify existing and potential funding sources and prepare possible solutions. The Ministry notes that from July 21 to July 27, the price of Brent crude oil increased by 14.5%, and the price of ICE Low Sulphur Gasoil rose by 17.1%. Although the legally defined price thresholds have not yet been reached, the minister believes that preventive action should be taken rather than waiting for a crisis to occur.

The previously adopted decision to extend the reduction of the excise tax on fuel helps mitigate the impact of price increases, but Valainis points out that developing support measures in emergency conditions takes significantly more time, and delayed action could create political, economic, and social pressure. The Ministry of Economics will continue to monitor fuel prices and, if necessary, submit specific decisions to the government.

Following the government meeting on July 21, Valainis noted that the government has already outlined possible scenarios and discussed support measures for both moderate and escalation scenarios. The increase in fuel prices has caused additional costs in the public sector, including interior and health sectors, so the government will continue to monitor the situation to prevent a reduction in service availability. Additional funding from the state budget will be allocated if needed.

It is recalled that on April 1, the Law on Limiting the Increase in Fuel Prices came into force, providing for a temporary reduction in the excise tax on diesel from 467 euros to 396 euros per 1,000 liters, while for marked diesel used in agriculture, the rate is set at 21 euros per 1,000 liters. On June 18, the Saeima adopted amendments that maintain the reduced rate until the end of this year.