The implementation of a fuel tax reduction, originally slated for November 1, will be delayed by a few days, pending approval of a bill by the Parliament.
According to sources within the Parliament, the bill to reduce consumption taxes on motor fuels, including unleaded petrol and diesel, has not yet been officially presented for discussion at the Parliament. In contrast, the Ministry of Finance contends that the legislation has already been submitted.
The delay is significant because the bill was part of a comprehensive government anti-inflation package aimed at curbing rising consumer prices. The proposed reduction would have seen consumption taxes on motor fuels lowered by 8.33 cents per litre.
However, with the bill yet to be debated and no Parliamentary session held yesterday due to the absence of numerous MPs abroad, the implementation timeline has shifted. It is now anticipated that the Parliament will convene on Thursday, November 2, to approve the bill. If this occurs, the new measures may come into effect as soon as Friday, November 3, allowing fuel station owners a brief window to adjust their prices.
Should the delay materialise as expected, the expiration of the measure will be extended by the number of days it is postponed. For example, if the reduction takes effect on November 3, it would remain in force until March 3, 2024.
In a separate development, the government has also delayed the planned reduction of consumption taxes on heating oil, which was originally scheduled for December 1. This measure, aimed at decreasing heating oil consumption taxes by 6.39 cents per litre, will now take effect from December 1, 2023, until March 31, 2024. The delay in this case is not as concerning due to the broader implementation window, which minimizes the immediate impact.
The government’s actions have sparked debate, with some advocating for the reduction of consumption taxes on fuels to be implemented earlier, citing concerns over rising fuel costs. However, the Ministry of Finance maintains that such a move is unwarranted at this time, attributing the decision in part to prevailing weather conditions.
In addition to these changes, the government has also announced a subsidy for electricity that will be granted by decree. This subsidy will cover billing for the months of November 2023 to February 2024, with a focus on readings up to February 29. It will apply to domestic, commercial, and industrial consumers, with the subsidy rate varying based on consumption levels. For those considered economically vulnerable, the subsidy increase will be set at 100%. The total cost of this electricity subsidy is projected to be €45 million.
Furthermore, a series of VAT changes will come into effect on November 1 and December 1, impacting a range of consumer goods, including coffee, sugar, bread, milk, eggs, baby food, and diapers. The government aims to provide temporary relief for consumers by reducing or eliminating VAT on these essential products. These VAT changes will be in place until April 30 and May 30, depending on the specific item.
