Czech Government Reinstates Fuel Price Caps, But Petrol Retailers' Union Head Calls It a Mistake

World oil prices have held above $100 a barrel for several weeks now, climbing nearly 30% over the past three months. Tensions in the Middle East are also pushing up prices at Czech pumps: diesel now costs around CZK 50 per litre on average, with petrol roughly CZK 4 cheaper, and both prices are edging toward the record highs seen in spring 2022, shortly after Russia launched its war against Ukraine.

In response, the Czech government is bringing back fuel price caps starting October 1. As it did in spring, the Ministry of Finance will announce daily maximum prices for petrol and diesel for the following day. At the same time, the excise duty on diesel will be cut to the minimum allowed under EU rules — a move that alone could shave up to CZK 2.35 off the price of a litre of diesel. The excise duty on petrol will remain unchanged.

Petrol Retailers' Union Head: The Measure Is Pointless

Ivan Indráček, head of the Union of Independent Petrol Retailers, calls the government's move "a completely meaningless tool," pointing out that this spring petrol stations were already forced to sell fuel for less than they had paid to buy it.

By his calculations, the average driver would save only around CZK 150 a month thanks to the price cap — a negligible amount — while the measure would cost the state roughly a billion crowns a month. Indráček notes that, relative to average wages, fuel today is actually cheaper than it was back in 2009.

The expert points to a global diesel shortage and argues that in such a situation, the government should be encouraging drivers to conserve fuel — instead, it has done the exact opposite. According to his data, drivers filled up more in the first half of the year than a year earlier: large fuel chains saw sales grow, while smaller petrol stations, by contrast, lost part of their customer base — price regulation erases the difference between stations and removes any incentive for drivers to shop around for cheaper fuel.

A New Tax for Oil Refineries

The cabinet will also cap refinery margins with a new windfall tax. It will apply to companies with annual revenue of at least CZK 2 billion, whose income from oil refining amounts to at least CZK 50 million a year. The tax rate is set at 50% of the increase in gross margin compared to 2025.

According to the Ministry of Finance, the idea was borrowed from a similar tax in Poland. Revenue from the tax this year is expected to reach around CZK 5.5 billion.

Formally, the emergency measures are due to expire on October 31, but Indráček believes the government will extend them — just as it did in spring. The head of the petrol retailers' union acknowledges that the authorities are in a difficult position, but adds: "it would be more responsible for the state to be honest with people and admit that this isn't really the problem — down the line, this could lead to fuel shortages, and we may well have to start conserving it."

Source: seznamzpravy.cz