A Finance Ministry amendment to legislation for a reduction in the special consumption tax (EFK) imposed on heating fuel and kerosene has been submitted to Parliament for ratification.
Based on current fuel price levels, the lower tax rate would reduce the cost of heating fuel to 1.13 euros per liter from 1.25 euros per liter. For persons entitled to heating fuel subsidies, as part of a support program offered to underprivileged social groups, the new price for heating fuel is expected to drop to between 80 cents (euro) and 90 cents per liter.
The amendment’s objective is to increase the consumption of heating and lighting fuel, which, by extension, would confront air pollution problems in urban areas caused by a turn to alternative heating solutions, often toxic, from numerous households under financial pressure.
Demand for heating fuel slumped two years ago after the government increased the tax rate on heating fuel to the level imposed on transportation fuel. However, the plan backfired, as tax revenues generated by heating fuel plummeted. The government hopes the tax rate decrease will boost heating fuel tax revenues.