Lithuania plans temporary diesel excise cut to ease fuel prices

VILNIUS - Lithuania’s Finance Ministry said on Tuesday it plans to propose a temporary cut in the diesel excise duty to ease rising fuel prices.

Finance Minister Kristupas Vaitiekunas said the measure would target diesel specifically, which has risen in price more than petrol and is widely used, including for state needs. The revenue loss would be offset by surplus value-added tax (VAT) receipts generated by higher prices.

“The Finance Ministry is considering and will likely soon come forward with a proposal to temporarily reduce the fuel excise duty. This would be a temporary solution, using the additional VAT we receive from increased prices to fund the excise reduction,” Vaitiekunas told reporters.

"This would apply to diesel fuel and marked diesel used by farmers," he added.

According to the minister, cutting the excise duty for two or three months could lower diesel prices by about six cents per litre.

"We are still assessing the exact impact on the price," Vaitiekunas said.

He noted that any reduction would require amendments to the Law on Excise Duty and notification to the European Commission. Lithuania could face penalties if it acted without consulting the European Union, as it would deviate from excise policy commitments linked to the country’s Recovery and Resilience Facility funding.

Vaitiekunas said the amendments would be submitted to parliament during the spring session, potentially under an urgent procedure.

“The matter is urgent, people are worried. We are simply making a straightforward excise reduction by roughly the amount we collect in extra VAT,” he said.

He stressed that it is important the tax cut is reflected at the pump and does not simply “settle somewhere in the sales chain.”