Fuel prices drop at Latvia's major filling stations after excise tax cut
Following an excise tax reduction that took effect on October 1, fuel prices at major Riga filling stations fell by several cents on Thursday, after diesel had hit a record high earlier in the week.
On Thursday, October 1, fuel prices at several filling stations in Riga dropped noticeably compared to the previous day. At the Circle K station on Krasta Street, diesel now costs 2.154 euros per litre — 6.5 cents cheaper than Wednesday — while 95-octane petrol fell by six cents to 1.994 euros per litre. At the Neste Latvija station on Dzirnavu Street, both diesel and petrol dropped by eight cents, reaching 2.127 and 1.977 euros per litre respectively.
Neste Latvija said that as of midnight on October 1, the company has fully reflected the excise tax reduction in fuel prices at all its stations across Latvia. However, the company stressed that beyond taxes, final prices are also shaped daily by market prices, exchange rate fluctuations, local competition, and a requirement in force since April that diesel contain at least 6.5% biofuel by volume.
Price drop with a delay
The Latvian Fuel Traders Association explained that the lower excise rate applies only to fuel leaving excise warehouses for stations from October 1 onward, meaning the price decrease across the station network will appear with some delay and will vary between retailers.
Amendments in force from Thursday through the end of the year reduce the excise tax on diesel by 16.7% — from 396 to 330 euros per 1,000 litres, the minimum level set by the EU — and on petrol by 11.7%, setting it at 490 euros per 1,000 litres. It had previously been expected that fully passing the tax cut into retail prices could reduce them by eight cents.
Earlier this week, diesel prices in Latvia had reached a record high — on Tuesday, the Circle K station on Krasta Street saw diesel exceed 2.23 euros per litre, surpassing the previous record set in April this year.
