Latvia considers cutting fuel excise and VAT to curb gasoline prices

Latvian Economy Minister Viktors Valainis said the government needs to discuss reducing the excise tax on gasoline.

The announcement came after a cabinet meeting reviewing a report on how global fuel prices are affecting the national economy, Caliber.Az reports, citing Estonian media.

Valainis added that lowering VAT on fuel, following the examples of Poland and Spain, is also under consideration.

Both measures will be discussed in upcoming sessions, including a proposed windfall tax on fuel retailers.

Under this plan, if a retailer’s fuel price exceeds a set level by more than 3%, the excess would be paid into the state budget.

The government aims to keep prices between €1.80 and €1.90 per litre.

The draft legislation has entered a second round of review, with non-governmental organisations allowed to submit comments until April 10.

The text has been updated based on input from the Ministry of Finance and the Competition Council.

By Bakhtiyar Abbasov