Lithuania to introduce excise duty on gas used for heating

The government on Wednesday approved the respective amendments to the Law on Excise Duties and would send them to the Seimas [parliament]. As estimated by the Ministry of Finance, which drafted the amendments, the introduction of excise duties on natural gas would generate additional 3.1 million euros in revenue for the central government budget.

The government plans to introduce the minimum rates of excise duties as established in the European Union’s (EU) legislation. The rate that would apply to non-business enterprises, establishments and organizations that do not have a beneficiary status would amount to 1.08 euros per 1 MWh, as a result of which the price of gas might increase by 0.01 euro per 1 cubic meter. The rate for business enterprises would amount to 0.54 euros per 1 MWh and the price of gas would then increase by 0.005 euros per 1 cubic meter.

Lithuania has to introduce the excise duty on natural gas under a respective EU directive that came into force back in 2003. The ten-year exemption period established in that piece of legislation expired on April 30, 2014, but the country has not introduced the levy. As a result, the European Commission may open an infringement procedure against Lithuania, the Finance Ministry has warned.

Lithuania currently only applies an excise duty on gas used as car fuel (of EUR 23.6 per 1 MWh).

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