Czech Government Prepares Measures to Curb Soaring Petrol and Diesel Prices

The Czech government has prepared measures to rein in rapidly rising fuel prices and will announce them after Monday's cabinet meeting. This was stated by Industry and Trade Minister Karel Havlíček during an appearance on CNN Prima News's Partie programme.

According to data from CCS, a litre of the country's best-selling petrol, Natural 95, cost an average of CZK 45.55 on Thursday, while diesel had already reached CZK 49.13 per litre. These are the highest petrol prices since the summer of 2022 and the highest diesel prices since March of that year. Compared with last year, petrol has gone up by roughly CZK 10 per litre, and diesel by nearly CZK 15. CCS recorded record prices on 23 June 2022 for petrol (CZK 47.97) and on 13 March 2022 for diesel (CZK 49.57).

The latest price surge has been driven by renewed escalation of the conflict in the Middle East and a shortage of refining capacity.

What the Minister Said

"We've always said that once neighbouring countries start reacting to the price hikes, we won't wait around. We have measures ready, and we'll present them on Monday after the cabinet meeting," Havlíček said, without revealing specific details.

Neighbouring Countries Already Stepping In

The Czech government's move comes in response to steps taken by neighbouring states. According to the DPA news agency, Germany's ruling coalition reached broad agreement on Friday on measures to ease high fuel prices, including cutting taxes on petrol and diesel by 17 cents (roughly four crowns) per litre and introducing price caps. Hungary, Croatia and Slovenia have also announced fuel price regulation in recent days.

Czechia already resorted to fuel price regulation earlier this year, from April to mid-July. Back then, the Finance Ministry set a maximum allowable margin for sellers and determined daily price ceilings, while also cutting the excise duty on diesel. According to then Finance Minister Alena Schillerová, the excise duty relief cost the state budget around one billion crowns in lost revenue every month.

What Analysts Recommend

Should price regulation return, analysts advise the government to favour targeted measures above all. The "cleanest" solution, they say, would be cutting the excise duty combined with monitoring retailers' trade margins. A strict price cap along the lines of the spring model, they warn, could actually fuel further increases, since high fuel prices on commodity exchanges would then feed through to final prices even faster.

Source: seznamzpravy.cz