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At today’s Question Time of the Riigikogu, Prime Minister Taavi Rõivas answered Kadri Simson’s question on fuel excise duty.

Kadri Simson recalled to the fact this year Estonia had raised the petrol excise duty by 10 percent and the diesel excise duty by 14 percent, while the corresponding numbers in Latvia were 3 percent and 7 percent. In her opinion, the increase of fuel excise duty rate influences mainly the behaviour of transport companies. Simson referred to the study conducted by TNS Emor, according to which the Estonian transport companies had been buying fuel in the countries where the excise duty rates were lower, like Latvia, Lithuania and Poland, since the fuel excise duty was raised. Simson added that Estonia was planning to increase the excise duty also the next year and the year after that. Simson wanted to know if the increase of the fuel excise duty had justified itself so far, and whether the Government might give up the plans to raise the excise duty in 2017 and 2018.

The Prime Minister replied that it was true that the increase of the fuel excise duty had been slower in Latvia. Rõivas emphasised that when different kinds of fuel were compared, then it could be said that the retail price of 95 petrol was almost the same in Estonia and Latvia. “There are small fluctuations here by days, but these fluctuations are much smaller, or the price difference with Latvia is considerably smaller than the price differences of the filling stations of Tallinn, so that it cannot really be considered noteworthy,” Rõivas said. “But you are right when you say that the price of diesel fuel, including the wholesale price of diesel fuel, which is used by transport enterprises for long-distance shipments, is lower in Latvia than in Estonia, it is also lower in Lithuania than in Estonia, but it would also be correct to say that it has been lower than in Estonia for several years already, therefore the raising of excise duty in itself did not change that fact,” the Prime Minister added.

The Prime Minister noted that the transport companies which operate in Europe and fill their cars where they wish, or in any country that happens to be on their way, have done so for years, in Latvia, Lithuania or Poland, whichever is cheaper. “But is it so important that Estonia always has to be the first in that race? Instead, it is also important for us that consumption should be environmentally sustainable and the Estonian tax system should be balanced,” Rõivas said. The Prime Minister added that in the future, too, we had to continue the taxation of consumption that damaged the environment and health.

“When we look at the trend of fuel price, then even after all these increases of excise duty, the fuel in Estonia remains cheaper by several dozens of cents than it was two years ago. Therefore I believe that for consumers, too, the raise of fuel excise duty in the situation where the price of oil is very low has the most logical timing, and naturally it would be more stupid to increase the excise duty when the oil price is at the top,” the Prime Minister said.

Prime Minister Taavi Rõivas also replied to the question of Külli Kübarsepp on the construction of rental apartments, the question of Martin Helme on the suitability of Saaremaa ferries to the existing ports, and the question of Henn Põlluaas on liquidating the Saaremaa Navigational Marking Service of the Estonian Maritime Administration.

Minister of Defence Hannes Hanso replied to the question of Mart Helme on the mandate of allied forces and the question of Jüri Adams on the preparation of domestic or international regulations regarding the use of drones.

Minister of Education and Research Jürgen Ligi replied to the question of Krista Aru on the principles of drafting the budget of the area of education, and the question of Mailis Reps on the budget strategy of the state.

The verbatim record of Question Time:

Riigikogu Press Service
Marie Kukk
+372 631 6456; +372 58 213 309
Questions: press@riigikogu.ee