Ministry of Finance proposes to suspend planned increase in excise duties
After the submission, the Seimas started to consider the proposals prepared by the Ministry of Finance not to increase the variable part of the excise duty (carbon dioxide (CO2) component) on diesel fuel used as motor fuel and subject to the standard excise duty rate from 2026, which will avoid significant price increases and contribute to not increasing the diesel price difference between Lithuania and neighbouring countries.
The aim of temporarily suspending the increase in diesel excise duties has been included among the priorities of the Twentieth Government, and the amended draft amendment to the Law on Excise Duty will allow this to be reflected.
“We listened to the expectations of the population, businesses and their arguments – in order to avoid a significant increase in diesel prices from 2026, we propose not to increase the carbon dioxide component of diesel fuel. This will avoid a significant increase in diesel prices, and the benefits of these amendments will be felt by everyone: both business and the entire population of the country", Minister of Finance Kristupas Vaitiekūnas states.
The draft law proposes to maintain the current CO2 component of EUR 53.6 per 1000 litres of product for diesel as of 1 January 2026 (instead of EUR 104.8 per 1,000 litres established in the Law on Excise Duty).
According to the provisions of the Law on Excise Duty, the total increase in the price of diesel fuel due to tax factors would have been around EUR 0.1 per litre. The suspended increase in the CO2 component would only lead to an increase in the fixed part of excise duties as of 1 January 2026, leading to an increase in the price of diesel of around EUR 0.04 per litre due to tax factors.
It is estimated that after the adoption of the draft law, revenue to the State budget in 2026 will be about EUR 60.6 million less than it would have been if the increase in the variable part of excise duties had not been halted.
Diesel is currently subject to an excise duty rate consisting of a fixed component of EUR 466 per 1,000 litres of product (EUR 500 per 1,000 litres of product from 1 January 2026) and a variable component (i.e. the CO2 component) of EUR 53.6 per 1,000 litres of product.
Last updated: 23-10-2025
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