Background information

In response to fuel-price increases linked to geopolitical disruptions and the closure of the Strait of Hormuz, Latvia temporarily reduced excise duty on diesel through the adoption of the Law on Limiting the Increase in the Prices of Petroleum Products. The measure aimed to ease cost pressures on households, businesses and public services, particularly in transport, logistics, agriculture and other fuel-intensive sectors. From 1 April to 30 June 2026, the standard diesel excise rate was reduced from €467 to €396 per 1,000 litres. The rate for marked agricultural diesel was set at €21 per 1,000 litres.

Content of measure

The measure is a horizontal, nationwide tax measure that applies to all diesel released for consumption in Latvia. It is not targeted by income, sector, company size or the legal status of the purchaser. In practice, the support reaches all diesel users, including private individuals, households, businesses and public-sector organisations, through lower retail diesel prices. The estimated price effect is around €0.086 per litre, including VAT. The reduction in excise-duty revenue is estimated at €6.7m per month, or approximately €20.1m over the three-month period. The measure was expected to have a limited net impact on public finances because higher fuel prices also generate additional VAT revenue. If retail diesel prices remained around €2.00 per litre, the policy was projected to be broadly fiscally neutral.

Use of measure

The exact number of beneficiaries has not been quantified. The annotation for this law states that the measure affects all fuel consumers in Latvia, including around 700,000 registered passenger-vehicle owners and their family members, as well as legal entities in sectors where fuel is a significant cost component. It also affects companies that place petroleum products on the Latvian market.

Target groups

Workers	Businesses	Citizens
Applies to all 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	No involvement as case not in social partner domain	No involvement as case not in social partner domain
Form	Not applicable	Not applicable

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

• No involvement
• Main level of involvement: N/A

Involvement

Social partners were not formally involved in the design, monitoring or implementation of the measure, according to public information. The official policy annotation identifies it as an initiative of the Ministry of Economics and lists only public institutions as participating bodies. There is some evidence of informal consultation with the fuel-retail sector. Public reporting indicates that the measure was discussed following a meeting with industry representatives, and the Latvian Fuel Traders Association commented publicly on the proposed excise-duty reduction. However, no formal role for trade unions, employer organisations or sector associations is documented in the measure’s design, monitoring or implementation arrangements.

Views and reactions

The only publicly identifiable stakeholder position appears to come from the Latvian Fuel Traders Association, which expressed cautious support for the measure. The association argued that lower excise duty could help reduce pressure on fuel prices, while emphasising that a range of other factors influence fuel costs. No public positions were identified from major employer organisations, trade unions or NGOs. The official policy annotation also records no formal involvement by these groups in the design of the measure.

Sources

• 11 June 2026: Law on Limiting the Increase in the Prices of Petroleum Products (Naftas produktu cenu pieauguma ierobežošanas likums) (likumi.lv)
• 11 June 2026: Annotation for the Law on Limiting the Increase in the Prices of Petroleum Products (Anotācija Naftas produktu cenu pieauguma ierobežošanas likumam) (titania.saeima.lv)