After investing millions, they feel cheated: due to the increase in excise taxes, product prices are expected to increase

Millions invested

Vidmantas Janulevičius, president of the Confederation of Lithuanian Industrialists, said that industry and business had already talked about increasing some pollution taxes, but, as he said, it was explained that these taxes should be the same for everyone, regardless of natural resources. used, whether oil or gas and their different types.

“However, during the pandemic, when electricity and agricultural heating became more expensive, companies switched from natural gas to liquefied petroleum gas (LPG) as this allowed them to be more flexible.

We are talking about poultry farms, food and waste processing plants here,” he said.

As he stated, companies invested in new power plants and used LPG for the production of their products.

“And now it turns out that excise duties are being increased on new LPG, while regular natural gas is not becoming more expensive. So where is the equality?” he asked.

According to V. Janulevičius, although there is still time until the beginning of next year, when the new excise duties come into force, solutions will have to be found.

“Now, everyone was buying equipment to diversify, to no longer be dependent, and it turns out that they will have to pay.”

We will look for a solution for the corrections, because there is a big exception,” he said.

Gytis Kauzonas, director of the Lithuanian Poultry Association, made a similar speech.

He stressed that in this situation, the company feels cheated. According to him, poultry farms are very large consumers of gas, and when energy prices increased, everyone was looking for ways to save money and therefore installed new equipment.

“We were looking for alternative sources, we feared that there would be a shortage of natural gas because of the war.

Who invested 100,000, every 500,000, every 3 million. euros, such as the “Vilniaus” or “Kaišiadorių” poultry farms. Now it turns out that there will be an excise tax, and the invested funds have not had time to pay off,” he said.

Production rates may increase

G. Kauzonas emphasized that companies, not wanting to pay excise taxes, should invest again and look for ways to heat the premises.

“Or the investments already made will have to be “written off” and this will be reflected in the prices of the products. They will then have to be raised, there is no other way,” he thought.

According to a representative of the Poultry Association, the industry is currently in turmoil.

“The company feels “taken” and deceived,” testified G. Kauzonas.

“Humanly, we have moved from imported fuel to local fuel.

In theory, propane and butane are more polluting (than natural gas) by measurement, but they are more calorific, so they are diluted with air and still produce the same pollution. So, if someone says that LPG is a more polluting method, it is not true,” the official explained.

He testified that he had calculated that if nothing changes, the company will have to pay 70,000 per month just for gas excise duties. EUR.

“840,000 people leave per year. EUR. This year, investments in fuel replacement amounted to 7 million. EUR, but their return is calculated from the possible profit. However, this means that due to this excise tax, it would decrease by almost a million more per year.

We will have to work even more efficiently, maybe do nothing, maybe not raise wages so quickly. The stick always has two ends,” warns G. Petrauskas.

Rimantas Smolskis, CEO of UAB “Rietavo veterinarinė sanitaria”, which is dedicated to the processing and destruction of animal by-products, assured that this would cause problems for almost the entire industry, and his company invested around 1 million euros in LPG. EUR.

“The government encouraged the transition to liquefied gas. We did not start working normally and the state radically changed its position. Today they no longer encourage it and are introducing an excise tax. It will be sometimes several times higher than natural gas. That seems strange,” he mused.

R. Smolskis calculated that gas costs would double, so that companies would cover part of the losses themselves and the other part would be transferred to the shoulders of consumers.

“We will be obliged to do it. We will think about how to share the burden,” he said.

Ministry: such a transition is not encouraged

Currently, the law provides that an excise duty of EUR 304 per tonne will be applied to new LPG and, from 2025, CO2 components of excise duties will be applied to petroleum gas, which will amount to in addition to EUR 30.6 per tonne and will increase over time. years.

Natural gas is distinguished from petroleum gas and taxed separately. The excise tax on natural gas used for heating (for professional purposes) will increase from 2026.

Tomas Aukštinaitis, senior advisor to the climate policy group at the Ministry of Environment, explained that the CO2 component will not be applied to natural gas at all.

“The CO2 tariff (excise component) will only be applied from 2025. and its scale is linked to the impact of each type of fuel on climate change.

Taking into account the recommendations of the OECD and the European Commission and in order to ensure the implementation of the greenhouse gas emission reduction targets set for Lithuania and to avoid having to pay hundreds in the future of millions in fines on the state budget, the law has renounced concessions. for fossil fuels,” he explained.

Speaking about the transition of activities from natural gas to petroleum gas, he assured that such a thing was not encouraged.

“Petroleum gas is inherently a more polluting fuel. Taking into account data from the national GHG accounting report, the impact of oil and gas on climate change is 17 percent greater than that of gas natural.

Additionally, in the case of natural gas, it can be blended with renewable biogas, thereby further reducing the impact on climate change, which is not possible with LPG.

Generally speaking, the Ministry of the Environment promotes the use of biomethane, thus allocating support from the Climate Change Program to the production of biomethane and the installation of biogas purification plants. 31 million were allocated this year. euros. Investments in biomethane production and biogas purification promote the development of green energy, reduce the use of fossil fuels and help achieve climate mitigation goals.

From a long-term perspective, a faster transition of businesses away from fossil fuels will lead to greater competitiveness, as locally sourced, non-polluting, renewable fuels will be used, and reliance on imports from countries outside the EU will also decrease,” said T. .Aukštinaitis.

The ministry did not specify what impact the introduction of the LPG excise would have on businesses.

Source: The Delfi

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