Latvia approves excise tax cuts for diesel and gasoline

The Latvian Saeima has approved amendments to the law restricting petroleum product price increases, aimed at reducing the financial burden of high fuel costs on citizens and businesses. The changes involve lowering excise tax rates for both diesel and unleaded gasoline.

Effective from October 1, 2026, through December 31, 2026, the excise tax for diesel will be reduced by 16.7%, dropping from 396 euros to 330 euros per 1,000 liters. For unleaded gasoline, the rate will be set at 490 euros per 1,000 liters, representing an 11.7% reduction. If fuel retailers pass these savings entirely to consumers, retail prices for both diesel and gasoline are expected to decrease by approximately eight cents per liter.

Economy Minister Viktors Valainis noted that tax changes often occur with a time lag and may only be partially reflected in pump prices. To offset the estimated 14.4 million euro impact on the state budget, the government plans to use surplus revenue from the sale of confiscated criminal assets. Aiva Vīksna, chair of the Budget and Finance Committee, stated the measure is intended to maintain business competitiveness amid rising energy costs.