May extension of the diesel “discount” – what changes and what remains
The package of measures aiming to support drivers will continue in May, the Czech government announced. The reason remains the same: instability in the Strait of Hormuz area and the related tension in the oil market, which is pushing fuel prices upward.
In a previous article, we explained how the reduction in excise duty on diesel works and how the state monitors petrol station margins.
The cabinet has now decided to extend the April measures – the tax relief on diesel as well as margin regulation to ensure the discount is actually reflected in petrol station prices – also into May. The excise duty on diesel will therefore remain reduced by CZK 1.939 per litre, which, once VAT is included, represents a saving of approximately CZK 2.35 per litre.
The state is thus keeping diesel taxation at the lowest level permitted by EU law. According to the Ministry of Finance, the April package has already delivered real savings for households and businesses – for larger tanks, savings could be up to several hundred crowns per refuelling. The government estimates the budgetary cost of this measure at roughly CZK 1 billion per month.
Two new adjustments to the regulation
In May, however, the way the state regulates the maximum permissible fuel prices will partly change. To make the measure work better over a longer period and reduce sensitivity to daily price fluctuations, two technical adjustments are being introduced:
- instead of a one-day wholesale price, a three-day moving average will now be used; and
- the maximum permitted margin for petrol stations is being set at CZK 3 per litre for both petrol and diesel.
According to the government, this does not mean an automatic price increase – the aim is to ensure stability, not “mandatory” price rises. April data showed that most stations had margins well below this threshold.
The new parameters for calculating maximum prices will be published in the Price Bulletin on the Ministry of Finance’s website. For ordinary customers, nothing material changes: the tax relief remains effectively ensured through margin regulation intended to prevent excessive mark-ups. In practical terms, May diesel prices should therefore continue to stay below the level they would reach without state intervention – both thanks to the lower tax and thanks to limits on petrol station margins.