Sweden to cut fuel taxes further as energy prices soar

STOCKHOLM, Sweden: Sweden’s government said Wednesday it would temporarily cut fuel taxes to counter rising fuel prices stemming from the war in the Middle East, after it already announced a cut in March.

The proposed cut would be 2.4 kronor ($0.25) per litre, which the government said would result in a litre of petrol or diesel being about 3 kronor cheaper the pump after VAT was accounted for.

The measure, expected to cost around 7.7 billion kronor, was part of a crisis package totalling 17.5 billion kronor presented by the government.

“We are now facing the worst global energy crisis the world has ever experienced. The situation in the Middle East remains unstable, and we will be put to the test,” Energy Minister Ebba Busch told a press conference.

Finance Minister Elisabeth Svantesson added that even if the war would end tomorrow, it would still affect “Sweden’s economy for this whole year”.

The standoff in the Strait of Hormuz, the gateway for around a fifth of the world’s oil and gas, has led to soaring oil and gas prices and affected economies around the world.

The Nordic country had already proposed a tax cut resulting in a price cut of one krona per litre for petrol and diesel.

Sweden has already lowered its fuel taxes to the minimum allowed by the EU and the new tax cuts, which are scheduled to go into effect from July 1 until November 30, would need approval from the European Council.

Busch said another billion was earmarked for reimbursing households affected by high electricity prices and that further measures, including for the agriculture and aviation sectors, would be presented in the future.

In late April, Sweden’s Prime Minister Ulf Kristersson said it was prepared for the possibility of rationing fuel in the coming months, even if there were currently no such plans.