TALLINN - The Finance Ministry is eyeing fuel and gas prices 's the cheapest in the European Union 's as a source of additional revenues for next year's budget and a means of combating fuel smuggling, but coalition partners in the Cabinet are balking at the idea.
Finance Minister Taavi Veskimagi wants to raise the excise tax on marked diesel and heating fuel, thereby increasing state budget revenues by around 1 million kroons (63,900 euros), but the People's Union, the junior partner in the coalition, said it might reject the proposal.
Veskimagi first suggested the idea at the Aug. 26 Cabinet meeting, justifying it with the need to combat an increasing excise tax fraud. However, a government spokeswoman said that the decision was put off in order to examine the suggestion in detail.
The People's Union Chairman Villu Reiljan told the daily Eesti Paevaleht that it's a question of principle.
"If the Tax and Customs Board started doing its job properly, excise taxes would be flooding in," Reiljan, who is the environment minister, said.
Blue-marked diesel is mostly used in agricultural machines and red-marked diesel for heating, and both carry a lower excise tax than regular diesel.
The Estonian Chamber of Agriculture and Commerce and a farmers lobby spoke out against the plan to raise the excise tax, accusing the government of poor administrative ability.
Also last week a new European Commission report showed that Estonia boasted the cheapest 95 octane gasoline in all 25 EU countries.
The price of 1,000 liters of gas as of Aug. 28 was 709.4 euros in Estonia, while in the next cheapest countries 's Latvia and Lithuania 's it was 722.5 euros and 787.1 euros respectively.
The most expensive gas in Europe was in the Netherlands (1,280 euros) and in the U.K. (1,208 euros), followed by Germany, Finland and Italy.