Latvian emergency service worried about possible fuel excise tax hike

Reacting to the idea about the planned increase of excise duty on fuel, Liene Cipule, the head of the Emergency Medical Service (EMS), has expressed her concerns about the fuel supply to the emergency services on the microblogging site "X" October 2.

According to Cipule, the NMPD has not been able to cover the cost of fuel from the budgeted funds for the last three years.

"Raise the excise however high you want. But fuel... The State Emergency Medical Service has reduced the mileage by 1.7 million kilometers in 2024 against 2016, but for the past three years, our budget can't cover the costs...  Police, school buses, firefighters, public transport – the decision will affect all," says Cipule.

The NMPD's annual budget for fuel is around €2 million. This has not changed since 2016, even though fuel prices have changed several times during this period, said Egils Lapiņš, head of the NMPD's Transport Support Department.

Since Russia's full-scale invasion of Ukraine in 2022, fuel prices have risen significantly and the NMPD is under-budgeted for fuel. 

On several occasions at the end of the year, the government decided separately on the NMPD's shortfall in funding, said NMPD spokesman Egils Lapiņš:


"We have a total mileage of around 1.15 million kilometers per month, and €2 million per year is no longer enough. Of course, we are always actively communicating with the ministry that we need additional funding. It is desirable that this should not be in the form of an allocation at the end of the year to make ends meet, but that, in line with the situation on the fuel market, this funding should be in the base budget. Unfortunately, this has not been found at the moment."

Planned changes to excise duties will make diesel 3.2 cents per liter more expensive at the retail level next year and petrol 2.7 cents per liter more expensive, the Finance Ministry has announced. It is clear that the increase in fuel costs will affect not only the NMPD, but also the operational internal affairs services, as well as the cost of procuring food. The question is therefore whether the excise duty change plan is irreversible.

The Ministry of Finance says that the changes are calculated and justified for several reasons. It explains in the annotation to the draft law that excise duty rates need to be revised in order to partly compensate for the reduction in labor tax revenues and also to increase the state budget.

In addition, the increase in excise duties is also subject to the European Union's CO2 quota requirements from 2027, which is why the budget plan is to introduce them gradually.

However, there is no talk of any excise duty relief for certain sectors, Karīna Ploka, Parliamentary Secretary of the Ministry of Finance, told Latvian Radio:

"Of course, we are aware that there are sectors where the fuel consumption is objectively higher - health and home affairs services - but at the same time it should be said that in general, it is not planned to reduce the base funding for any ministry. On an annual basis, each ministry has some left over and some left underspent, and then funds can be reallocated to what is needed. There is therefore no reason to fear that the NMPD service could be disrupted. Of course, if suddenly fuel prices were to rise sharply, the government would certainly address this."

The NMPD budget next year will be EUR 1.6 million less than this year, which is why the service is also looking at various changes to the way it organizes its work. For example, it plans to reduce the number of night-time ambulances and introduce a new principle of hospitalization as close as possible to the hospital. Also, some of the service's medics are being trained in safe driving and the service's drivers are being trained to support the medics. From October 1, the prices of the services provided by the service have also increased.

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