The opposition is critical, it wants to regulate prices
Opposition politicians have also described the reduction in excise duties as insufficient support. According to SPD chairman Tomia Okamura, the government is handling rising prices in a way that “basically does not help anyone”. “Reducing gasoline and diesel prices by one krone is a completely ridiculous fact compared to neighboring countries. The comparison with surrounding countries is important here,” Okamura told the House of Representatives on Thursday.
YES Vice-President and former Finance Minister Alena Schillerová said the movement would like to call an extraordinary meeting of the Chamber of Deputies not only because of gasoline prices. Excise duty cuts are insufficient and are also slowing aid, he says. He would consider it more appropriate to exempt fuels from value added tax due to their current price increase, but the government refused.
According to ANO President Andrej Babiš, the movement wants to cap prices at a maximum of 36 crowns per litre, which could be helped by a reduction in VAT or excise duties.
However, it was the Union of Independent Petroleummen that opposed the idea of capping gasoline prices. Indráček has previously warned that any measure related to the setting of a fuel price cap, whether in the form of limiting retailer margins or setting a maximum price per liter of petrol or diesel, would lead to market restrictions.
Jan Skopeček, Deputy Speaker of the Chamber of Deputies (ODS), also disagrees with the price cap. This, he says, is irresponsible. “It’s a dangerous measure, in fact the worst, that can lead to a shortage of this product,” he said, adding that price regulation has never been a good thing.
According to Skopeček, it is not fully guaranteed that the current government measures will affect consumer prices. “On the other hand, there is relatively strong competition in the Czech Republic in the volume of petrol stations, so I think that even with the psychological pressure to control margins, this can still translate into at least a partial decline gasoline prices,” Skopeček said.
Roman Kubíček (YES), deputy chairman of the Chamber’s economic committee, thinks that there is a reduction in the general package. “I would recommend the government focus on the whole distribution chain, from refinery policy, fuel distributors and filling station margins,” he said. Like his party colleagues, he sees greater benefits in capping fuel prices and directly subsidizing large carriers.
Analysts disagree on the effect of lowering taxes, they know prices won’t drop right away
Some analysts are also surprised at the form of aid prepared by the government for motorists, and therefore for road hauliers. “The reduction should only be temporary and will only apply from June. However, drivers are currently struggling with high prices and in the middle of the year the situation could be different,” said Jiří Tyleček, analyst at XTB.
Moreover, he believes that the price reduction will eventually be slight. “The tax cut could extend to the margins of the entire fuel supply chain, from refineries to gas stations. I don’t believe the state would be able to prevent that from happening,” said said Tyleček.
According to Finlord analyst Boris Tomčiak, the reduction in the excise tax of CZK 1.50 per liter should be fully reflected in the final prices. But that won’t really happen until June, when the tax is expected to drop.
In addition, the analyst expects the impact on the state budget to be greater than that announced by the Ministry of Finance – about five billion. “About eight billion liters are consumed annually in the Czech Republic, so the impact, including lowering the collection of VAT, which is practically imposed on the excise tax when setting the final price, will be d ‘about five billion crowns, if the reduced tax lasts until the end of September, according to the government,’ Tomčiak said.
According to him, this will help the carriers, they will not have to increase the price of their services so much. The decision will also make a small contribution to reducing inflationary pressures, he said.
Gasoline for 43.88 crowns per liter
The average price of petrol (Natural 95) is now 43.88 crowns per liter and diesel 46.62 crowns per litre, according to data from the CCS, which monitors fuel prices. Compared to last week, petrol costs 46 cents less, diesel costs 33 cents less per litre.
The cheapest is refueling in the South Bohemian region, where a liter of gasoline costs an average of 43.22 crowns and a liter of diesel costs 46.09 crowns. The most expensive fuels are found in Prague, petrol costs an average of 44.30 crowns per liter and diesel 47.22 crowns per litre.
Gasoline and diesel prices hit record highs around March 10 due to the Russian invasion of Ukraine, after which oil rose sharply and the krone weakened against the dollar. A liter of Natural 95 cost on average more than 47 crowns, the average price of diesel exceeded 49.50 crowns per litre. In the following period, prices mostly fell, temporarily returning to the previous week’s high.