Fuel price surge expected for February, chamber of commerce calls for the reallocation of all road fuel excise revenue to road maintenance
The Estonian Chamber of Commerce and Industry sent a letter to the minister of economic affairs and infrastructure on Thursday proposing to direct all revenue from fuel excise duties to road maintenance, like it used to be done before 2015.
In the organization’s view, given the present macro-economic situation, it is essential to ensure extended and stable funding for road maintenance as well as for infrastructure investments. An increase in road maintenance financing was necessary to improve the competitiveness of the Estonian economy, and make regional competitiveness fairer, the chamber said.
If road funding was still connected to fuel excise revenue, more than €350 million, which is approximately €100 million more than at present, would be available for the maintenance of national roads in 2017. Switching back to the old system, the annual volume of road maintenance funding would be around €100 million greater in the years from 2018 to 2020 as well.
A return to the previous system would mean that the funds set apart for the maintenance of roads would amount to at least 75 percent of all revenue collected from excise duties, except for fiscally marked fuels and natural gas, as well as 25 percent of the excise on fiscally marked fuels.
Increased funding would make it possible to expand the full length of the Tallinn-Tartu highway to four lanes, and help develop the Tallinn-Narva as well as the Pärnu-Ikla highways as well, the chamber said.
Between 2014 and 2016, around €240 million a year was allocated to road maintenance, which means that funding has not increased since the previous regulation was replaced. The inflow of fuel excise revenue into the state budget, meanwhile, has increased markedly, and is set to continue growing over the coming years due to further excise duty increases.
Revenue is projected to be €556.4 million in the 2017 state budget, for instance, while road maintenance funding according to the road management plan will amount to just €258 million. Fuel excise revenues increased by approximately €151 million in the 2014-2017 period, while funding of road maintenance has only grown by €30 million.
Surge in consumer price of fuel expected for February
Daily Postimees reported on Friday that the Estonian fuel companies were expecting a surge in the consumer price of both gasoline and diesel. The market was slowly moving towards a “normal” market price—a level where companies weren’t forced to sell fuel to consumers almost at cost, as Indrek Sassi of Circle K/Statoil said.
This would add to the expected five-cent increase per liter of fuel due to raised excise taxes to enter into effect in February, and might lead to a very noticeable surge in prices, Sassi said.
Editor: Editor: Dario Cavegn
Source: BNS, ERR