Czechs cap fuel prices, tax refineries as prices soar

The Czech government said Monday it is imposing a ceiling on fuel prices, cut excise tax and tax refineries as prices keep rising because of the Middle East war.

It is the second such step by Prime Minister Andrej Babis this year following price caps and excise tax cuts in effect between April and July.

Global fuel prices have been rising since the beginning of the Middle East war pitting the United States and Israel nearly seven months ago.

Iran has been blocking the crucial Strait of Hormuz, restricting Gulf crude exports.

"The government has approved a proposal to resume fuel price regulation as of October 1," said Czech Finance Minister Alena Schillerova.

"At the same time, we are cutting the excise tax on diesel to the minimum permitted by European Union rules," she added.

The average diesel and petrol price at Czech petrol stations reached 44.21 koruna ($2.08) per litre in August, up from 34.49 koruna ($1.63) in August 2025, said the CCS company monitoring the market.

Schillerova said the finance ministry would set maximum petrol and diesel prices daily.

The ministry will cut maximum profits taken by petrol stations from fuel sales to 2.5 koruna per litre, and slash excise tax on diesel to about eight koruna per litre from the current 9.95 koruna.

The government will also introduce a temporary tax on refineries, "a sector benefitting from the price growth", Schillerova told reporters.

The tax imposed from this year will amount to 50 percent of the price difference fuel prices in 2026 and 2025, and between fuel prices in 2027 and 2025 for next year.

Countries across Europe have responded to the fuel price rises by adopting similar measures. Several have also seen protests against the high prices, which have added pressure to the European economy.