Government approves one-year extension of coronavirus fuel excise duty cuts

The government has approved a bill which will prolong excise duty cuts on fuels, electricity and gas aimed at mitigating the effects of the coronavirus pandemic for and extra year, to help economic recovery reach all areas of the economy, including the oil shale sector.

The temporary reduction in excise duties on electricity and some types of fuels was put in place in May last year in response to the coronavirus pandemic. The government’s decision, made at an extraordinary sitting on Tuesday, will extend it to late April 2023.

The freeze on excise duties will impact the state budget, leaving a hole of €53 million in 2022, rising to €93 million in 2023, then falling to €75 million in 2024 and €44 million in 2025, the finance ministry says, as the excise duties are raised incrementally.

The new law is scheduled to enter into force on May 1 2022, in other words when the existing one expires.

From May 1 2023, a gradual increase in increments will take place, which the government says should allow businesses and consumers to adjust to price increases in a timely manner.

From May 1 2023, excise on diesel, for instance, will rise to €399 per 1,000 liters, then on May 1 2024, it will stand at €428 per 1,000 liters. The figures for the following two years are €459 and €493 per 1,000 liters respectively, BNS reports.

Read more: ERR.EE

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