The Council of the European Union has adopted an implementing decision authorising Croatia to apply reduced excise duty rates on gas oil and unleaded petrol used as motor fuels, below the EU minimum levels, from 1 August 2026 until 31 January 2027. The decision, published on 7 July 2026 and adopted at the Council meeting of 8 July 2026, allows Croatia to reduce excise duty by up to 0.225 EUR per litre for gas oil and 0.2195 EUR per litre for unleaded petrol. The temporary measure is intended to cushion the impact of sharp energy price increases triggered by geopolitical developments in the Middle East, which have disrupted supply chains and posed risks to households, SMEs, social cohesion, and economic stability.
The authorisation is granted under Article 19 of Directive 2003/96/EC, which allows Member States to introduce reduced rates for specific policy reasons for a limited period. Croatia requested the derogation citing exceptional circumstances caused by the Middle East crisis, which led to a surge in retail fuel prices. The Council assessed that the measure is proportionate and does not distort competition in the internal market, as it is limited in time and scope. The decision also stipulates that the authorisation ceases to apply if the Council introduces new minimum taxation levels under Article 113 TFEU to which this derogation is not adapted.
Croatian households and SMEs will benefit from lower fuel costs, easing the burden of high energy prices. However, the reduced excise duty will lower tax revenues for Croatia, potentially affecting public finances. EU competitors in neighbouring countries may face a slight competitive disadvantage if Croatian fuel prices become significantly lower, though the temporary nature and small size of the Croatian market limit the distortion. The measure also reduces the incentive for energy efficiency and fuel conservation, as lower prices may sustain consumption levels. The decision is addressed to Croatia and takes effect upon notification, with no further institutional follow-up required beyond monitoring by the Commission.