Background information

The government of Finland is lowering the excise duty on liquid fuels (nestemäisten polttoaineiden valmistevero). The parliament passed an amendment to the Act on excise duty on liquid fuels 1472/1994 (Laki nestemäitsen polttoaineiden valmisteverosta) which entered into force on 1 January 2024.

The purpose of the amendment is to increase the purchasing power of households and to compensate for the price increase of fuel driven by the rising distribution obligation of the share of renewables in transportation fuels (see also FI-2025-1-3919)

Content of measure

The reduction in excise duty is on an average of 3.9 cents per liter (€) for gasoline and its substitutes, and an average of 3.8 cents per liter for diesel and its substitutes. The reduction in excise duty is estimated to lower the VAT-inclusive pump price of gasoline by approximately 4.4 cents per liter and the VAT-inclusive pump price of diesel by approximately 4.9 cents per liter. In the government proposal it is estimated that the measure lowers tax income by €168 million.

The Tax Administration lists that excise duty on liquid fuels is paid on motor gasoline, small engine gasoline, bioethanol, ethers used as additives in motor gasoline (MTBE, TAME, ETBE and TAEE), biogasoline, ethanol-diesel, diesel oil, paraffinic diesel oil, biodiesel oil, light fuel oil, biofuel oil, heavy fuel oil, aviation gasoline, kerosene-type jet fuel, methanol and LPG.

Use of measure

The government has in their proposal estimated that the amendments would increase households' disposable income by an average of around 0,1%

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Applies to all citizens

Actors and funding

Actors	Funding
National government	No special funding required

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Consulted	Consulted
Form	Direct consultation outside a formal body	Consultation through tripartite or bipartite social dialogue bodies

Social partners' role in the implementation, monitoring and assessment phase:

• No involvement
• Main level of involvement: Peak or cross-sectoral level

Involvement

The proposal has undergone consultation rounds both in and outside parliamentary bodies

Views and reactions

The peak-level trade union SAK has in their consultation response noted that as per the Climate Act 423/2022 [Ilmastolaki], Finland has pledged to be climate neutral by 2035. The trade union raises concern that a market trajectory in the transport sector will diminish the possibility for Finland to fulfil this pledge.

The peak-level employers’ organisation Confederation of Finnish Industries EK has in their consultation response thanked the government for their work to alleviate the financial situation of logistics companies.

Sources

• 13 September 2023: Request for comments on the draft government proposal to Parliament for an amendment to the annex to the Act on Excise Duty on Liquid Fuels [Lausuntopyyntö luonnoksesta hallituksen esitykseksi eduskunnalle laiksi nestemäisten polttoaineiden valmisteverosta annetun lain liitteen muuttamisesta] (www.lausuntopalvelu.fi)
• 09 October 2023: Government proposal to Parliament for an act amending the annex to the Act on Excise Duty on Liquid Fuels [Hallituksen esitys eduskunnalle laiksi nestemäisten polttoaineiden valmisteverosta annetun lain liitteen muuttamisesta] (www.finlex.fi)
• 22 August 2025: Excise duty on liquid fuel (www.vero.fi)