Government cuts diesel VAT to 10% until 28 September

The Government has lowered value-added tax on diesel from 18% to 10% in a decision adopted yesterday; the measure will remain in force until 28 September. The step was announced as a temporary response to the risk of disruptions in the supply of crude oil and petroleum products, intended to ease the price shock on households and businesses.

Officials said the reduction targets diesel only and is designed to blunt an expected rise in retail fuel prices. The Energy Regulatory Commission is scheduled to publish new fuel prices today.

Expected effect on pump prices

According to the Government's assessment, lowering VAT from 18% to 10% will significantly mitigate the projected upward pressure on fuel costs. The measure is framed as a short-term relief while authorities monitor supply conditions.

Authorities stressed the decision is conditional and temporary: it applies until 28 September, after which the tax rate may be reassessed depending on market developments and supply security.

Drivers and businesses that rely on diesel were identified as primary beneficiaries of the cut, which aims to reduce operating costs and limit inflationary effects stemming from higher energy prices.

Photo: press material from the event