Czech Republic Revives Fuel Margin Caps, Plans Windfall Tax on Refineries
Czech government reinstates fuel margin caps and cuts diesel tax for October, while proposing a 50% windfall tax on refinery margins for 2026-2027.
The Czech government will reintroduce caps on retailers' fuel margins and reduce the diesel tax for October, the Finance Ministry said on Monday, responding to energy market pressures linked to conflict in the Middle East.
The renewed regulation sets the cap on retail margins for petrol and diesel at 2.5 Czech crowns per litre, while the diesel tax will be lowered to the European Union minimum. The measures, which will remain in force during October, are expected to cost the state budget 1.1 billion crowns.
According to the ministry, the decision to reinstate the regulation follows the escalating Middle East conflict and restrictions on oil supplies from Saudi Arabia to European refiners. The government had ended previous price cap mechanisms in July after introducing them in April this year, when U.S. and Israeli strikes on Iran caused a surge in global oil prices.
Separately, the government approved a proposal for an extraordinary tax on the refining sector, to be applied in 2026 and 2027. The tax would be set at 50% of the increase in gross margins compared with 2025. It is expected to apply to the sole operator of Czech refineries, Poland's Orlen.
The ministry anticipates raising 5.5 billion crowns for the budget from the proposed tax in 2026. The windfall tax must still be approved by parliament.