Government cancels planned rise in excise duties on energy carriers

Prime Minister Kristen Michal remarked that there is no good timeframe for predicting the duration of the crisis in the Middle East and that it is not known when calm will be restored. "A report we were given in our cabinet meeting today made it clear that our country's reserves are adequate for any crisis," he said. "People and businesses in Estonia have no need to worry about security of supply. That said, disruptions are affecting prices across the region, including here. As a result, we agreed today in principle that the Estonian Stockpiling Agency will make its own contribution to the IEA's operation to release reserves. Estonia will stand in solidarity. Countries with larger reserves are releasing strategic stocks onto the market, which will provide some relief. Nevertheless, the crises are very quickly impacting prices at the pump, the retail prices of Estonian fuel. All of this led to our decision, as proposed by the Minister of Finance, to cancel the rise in excise duties on energy carriers that was planned for May. At a time when prices are on the up, it makes no sense to implement decisions taken in other circumstances."

Minister of Finance Jürgen Ligi echoed the prime minister's words. "In a situation of steeply rising prices and anxiety, it is unreasonable to put into effect a decision that was made under different conditions," he said. "Barriers to supply are behind the current price increases on the global market, which means that the solution lies, first and foremost, in removing those barriers and upping the supply."

The precise impact on the Estonian economy and national budget of the price changes resulting from the Middle East crisis will become clear in the analyses accompanying the spring economic forecast, which will be published in April.

The IEA has proposed releasing the strategic oil reserves of its member states to alleviate the disruption to oil markets caused by the crisis in the Middle East. The proposal is for a total of 400 million barrels of fuel to be sold on the market over 90 days. This represents the biggest reserve release in history.

Estonia's contribution as a member state of the IEA will be around 34,000 tonnes of oil equivalent. This will help to calm global oil markets and ease supply disruptions. Larger countries like the United States and Japan will be making a greater contribution to the supply of fuel on the market.

Detailed decisions on which fuel reserves will be sold in what volume and for how long will be taken by the government in the coming weeks. The reserves will be replenished once the market situation has stabilised.

Government Communication Unit