Lower Tax on Energy Extended to 31 July

By , 29 Apr 2022, 14:12 PM Business
Lower Tax on Energy Extended to 31 July pxhere CC-by-0

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STA, 28 April 2022 - The government has extended the validity of reduced excise duties on electricity, motor fuels, heating oil and natural gas for heating for three more months until 31 July.

The reduced excise duties on energy products first kicked in on 1 February as part of a package of measures to mitigate the impact of energy price hikes on the population and businesses.

The government later also capped the retail and wholesale prices of regular petrol and diesel fuel. It has recently also extended the cap on the prices of heating oil by another month.

Announcing a new extension of the reduced excise duties after the cabinet session on Thursday, the Finance Ministry said it was trying to help the population and businesses cope with the high oil prices by fiscal policy measures as well.

The reduced excise duties are 35.9 cents per litre of petrol, 33 cents per litre of diesel, 7.875 cents per litre of heating oil and 85.5 cents per megawatt hour of natural gas for heating.

Unless the government extends by the end of this month administered prices of most motor fuels, these are expected to go up next week.

Estimates by the newspaper Finance show petrol prices could exceed EUR 1.60 a litre on 1 May unless the government extends the price cap. Diesel could cost EUR 1.82 a litre, taking into account reduced excise.

As of February the excise duty on electricity was reduced from EUR 3.05 per MWh to EUR 1.525 per MWh for small consumers and from EUR 1.80 to EUR 0.90 per MWh for large consumers (over 10.000 MWh per year).

The reduced duty has been extended by three months, while the temporary freeze on network charges remains in force until the end of April.

Asked about a potential extension or new measures to mitigate price hikes beyond the planned periods, the Infrastructure Ministry has not provided an answer.

At the beginning of April, Prime Minister Janez Janša said the government would continue to intervene as long as necessary to contain high electricity prices, until these are reduced through a change in the European formula for the calculation of electricity prices. The funds were to come from state-owned power producers.

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