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Czech government will cap fuel retailer's margins and lower excise taxes

Andrej Babis, the Prime Minister of Czech Republic, said on Thursday that the government had agreed to cap fuel retailer's margins and reduce excise tax to limit fuel prices rising.

Other governments in central Europe have also taken measures to reduce the impact of fuel prices resulting from the conflict in the Middle East, and the rising price of oil.

Babis said at a press conference that the "chaos", caused by the lack of coordination between the central European countries, was due to the fact they had adopted?various?measures in order to curb the fallout from energy crisis.

He said that his government would'start price controls on April 8 by capping margins on gasoline and diesel at?2.50 Crowns ($0.12), and by lowering the tax on diesel from 9.95 Crowns per litre to 2.35 Crowns.

He said that a'maximum price would be set each day under the system.

Babis stated, "We believe this is a measure that will help everyone - citizens, businesses and the economy."

Since the U.S.-Israeli strikes against Iran began on February 28, fuel prices have increased.

Since the beginning of the conflict, the average price for gasoline per litre in the Czech Republic has increased by around 8 crowns to 41.60?crowns. CTK reported that diesel prices have risen around 15 crowns per litre to 48.33, citing data from fleet service provider CCS. The government has already taken the step of releasing 100,000 tonnes of crude oil from the state reserves to the sole refiner in the country, Orlen Unipetrol.

Orlen and MOL, both of which are large fuel retailers with refinery systems in Hungary, have both a presence here.

Central Europe has also been affected by an interruption in the supply of Russian oil to Slovakia and Hungary, due to an issue with the Druzhba Pipeline in Ukraine. Kyiv claimed that a Russian strike had damaged pipeline equipment.

(source: Reuters)