President promulgates law on limiting sharp rise in fuel prices

RIGA - President Edgars Rinkevics has promulgated a bill which was fast-tracked earlier this week aimed at limiting sharp rises in fuel prices, according to an announcement on the official government gazette Latvijas Vestnesis.

The bill will come into force on Saturday, March 28.

The Saeima on Thursday passed in the final reading a law on limiting the increase in fuel prices, which provides for short-term measures aimed at mitigating the impact of the price hikes on the Latvian economy and population.

The bill was supported in the second, final reading by all 94 deputies who attended the Saeima meeting.

The law provides for a temporary reduction in the excise duty on diesel fuel - from the current EUR 467 to EUR 396 per 1,000 liters. For marked agricultural diesel, the excise duty rate is set at EUR 21 per 1,000 liters. The reduced rates will be in effect from April 1 to June 30.

The aim of the new regulation is to mitigate the negative impact of rising fuel prices on household spending, business costs and the overall inflation rate. Fuel price increases have a significant impact on the costs of transport, logistics and other sectors, creating a further cost-push effect on the prices of goods and services.

The adoption of the bill is linked to a significant increase in fuel prices on international markets due to geopolitical events and disruptions in oil supply chains. In recent weeks, there has been a sharp increase in the price of oil and diesel, which has a direct impact on the Latvian market, given the high share of imports in the fuel supply.

In view of the evolving situation, the government devised a temporary solution to respond promptly to price fluctuations, at the same time maintaining the balance of the state budget. The reduction in excise duty will partially offset price increases and help stabilize the economic environment.