In its search for opportunities to reduce fuel prices, or at least not so sharply, the country has concluded that it is not ready to cut taxes, nor will we abandon the biofuel additive, which has been added to fuel since April and threatens to increase prices by another ten cents.
The state does not plan to intervene to reduce fuel prices
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IN SHORT
Fuel prices in Europe have fallen last week, but are expected to rise due to biofuels
World oil prices and fuel prices in Europe have fallen last week, said Ojārs Karčevskis, chairman of the Latvian Fuel Traders’ Association Council. This happened for several reasons.
Firstly, because of the ongoing peace talks, and secondly, because the members of the Organization of the Petroleum Exporting Countries have announced plans to increase their oil production, and the United States has announced the release of reserves.
“Consequently, the prices of diesel fuel at the stock exchange and filling stations in Latvia have also decreased. The second thing is that the biofix has started from the second date, but its effect will be gradual, let’s see from day to day what this change will be in the stock market prices for both biocomponents and diesel fuel, then consumers will be able to see it as well, ”explained Karčevskis.
Currently, fuel prices in Latvia do not change, but buyers are warned about the increase in prices of biofuel additives by up to 12 cents per liter.
As a result, both the industry and major consumers, as well as politicians committed to finding solutions to reduce fuel prices, have dried up. Reductions in the value added tax rate or the abolition of excise duty would be most felt by buyers.
Politicians: it is important to maintain fiscal discipline and the country’s credit rating; the issue of the biocomponent cannot be postponed
However, the Minister of Finance Jānis Reirs (“New Unity”) soon announced that no tax rebates our country can afford. The reasons for this are also mentioned by the Chairman of the Saeima Economic Commission Krišjānis Feldmans (“Conservatives”).
“If ever we could talk about Latvia being able to borrow in foreign markets at negative interest rates, then this situation has changed rapidly, taking into account our geographical location, and now any increase in external debt or co-financing of existing debt is going to be positive. , rather than negative interest rates, thus relating to fiscal discipline,
this issue is becoming increasingly important: maintaining fiscal discipline and also the country’s credit rating. “
explained Krišjānis Feldmans.
In essence, it acknowledges that our country’s budget is currently very limited, and we are looking forward to the second half of the year when some experts warn of an economic recession.
The third option provided for the possibility to abandon or reduce the biofuel additive. Fuel traders objected immediately because supply contracts had long been in place.
In turn, those responsible in state institutions recalled that this is a policy of the entire European Union, which Latvia cannot influence in any way. Mr Feldman had another argument in the Energy Security Working Group coordinated by the Ministry of Economics on Monday.
The status quo must be maintained, that is, the issue of biocomponents should not be postponed, as it is linked to the general shortage of petroleum products, including diesel, in Europe, and therefore any reduction in the biocomponent in the production process means that it should be replaced by a fossil product currently on the market. , available in limited quantities. As a result, it seems that the “status quo” could be maintained, “Feldmans said.
The Ministry of Finance rejects the idea of further reduction or non-application of excise duty to farmers
Farmers, who are also entitled to a reduced rate of excise duty and therefore cheaper fuel, are also concerned about rising fuel prices. Mārtiņš Trons, a member of the board of the association “Zemnieku saeima”, said that the answers of the highest officials to the letter are still waiting.
“The consumer – the ordinary – can probably drive in a month, how many? Lighthouse – the lighthouse has about 70 liters. For us, however, the fuel consumption in agriculture is much higher – if it is a livestock farm, then several hundred liters of fuel already go there a day, but in the winter, spring period, as soon as field work begins, it also goes there 50, 60, 70 liters per hectare in spring period, it may be, ”Tron explained.
Farmers would like to see an even lower excise duty or even no one at all.
However, despite the proximity of the elections, the Ministry of Finance rejects such an idea, at least for the time being.
The idea of helping is the chairman of the council of the Fuel Traders’ Association Karčevskis, but it would not help farmers. He offers targeted support.
He said that motorists who could only reach the municipality by car could be supported through the municipalities and suggested that targeted support be provided for certain social groups. Karčevskis believes that this is not utopian, because already retirees are counting 20 euros for electricity, so targeted support could also be counted as fuel.
Thus, it can be concluded that the state does not plan to intervene in the fuel price market, at least in the near future, but meetings and working groups at various levels are still ongoing.
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