Estonia freezes fuel tax hikes and taps oil reserves amid price chaos
Estonia has cancelled planned increases to fuel excise duties as global oil prices surge. The move aims to protect households and businesses from rising costs linked to tensions between the US, Israel, and Iran. Meanwhile, the government will also release oil reserves as part of an international effort to stabilise prices.
Global oil prices have risen sharply in recent weeks. Brent crude climbed from around 71 USD per barrel on 26 February to nearly 119 USD by 9 March, before dropping to 87.57 USD two days later. The spikes followed escalating tensions involving the US, Israel, and Iran.
Under earlier plans, Estonia was set to raise excise duties on petrol by 5% and diesel by 7% from 1 May. Cancelling these hikes could reduce state revenues by 30–40 million euros, depending on oil market fluctuations. The government decided to scrap the increases to ease pressure on consumers and businesses.
Estonia will also join the International Energy Agency's (IEA) coordinated release of oil reserves. The IEA has proposed freeing 400 million barrels globally to curb price spikes. Estonia's contribution will be around 34,000 metric tons of oil equivalent, managed by the Estonian Stockpiling Agency (EVK). Officials will decide in the coming weeks which reserves to release and in what volumes.
The released stockpiles will be replenished once market conditions settle.
The government's decision to cancel excise hikes and release reserves follows sharp oil price swings. These steps are intended to lower fuel costs for consumers and businesses. Final details on the reserve release, including timing and quantities, will be confirmed in the next few weeks.
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