Latvian regional public transport operators are poised to receive increased advance payments to offset rising fuel costs, following a conceptual agreement reached Thursday by the Ministry of Transport, the Latvian Transport Directorate (ATD), and the Latvian Passenger Carriers Association (LPPA).
Ivo Ošenieks, president of the LPPA, stated that the proposed solution involves reallocating funds initially earmarked for later loss coverage to the coming months, potentially as early as March, as well as April and May, to help carriers pay for fuel.
“To cover these additional costs with the advance payment, it could be an additional 1.5 million euros per month on top of the current advance payment. Currently, the advance payment is around 4.5 million euros,” Ošenieks said.
Jānis Lapiņš, chairman of the board of the ATD, emphasized the necessitate for a swift resolution to redistribute the funding to carriers, noting that they cannot afford to wait given the current high fuel prices.
Lapiņš indicated that the first quarter’s advance payment has already been made to carriers, but acknowledged the exceptional circumstances and expressed hope for an agreement with the State Treasury to increase the amount of the first quarter advance.
Kristaps Zaļais, parliamentary secretary at the Ministry of Transport, said that carriers are directly affected by the increase in fuel prices, and that several possible scenarios were evaluated. He also noted a cross-ministerial meeting was held, including discussion of declaring a state of emergency, but the current agreement calls for a longer-term assessment of the situation.
When asked if the proposed solution would require the Ministry of Transport to seek additional funding from the government at the end of the year, Zaļais stated that the advance is occurring within the framework of the existing contract, and that everything will depend on the overall situation and how long it lasts.
CONTEXT:
Passenger carriers have urged Transport Minister Atis Švinks to find quick solutions to the fuel price increases caused by the conflict in the Middle East.
Carriers point out that the military conflict in the Middle East has created a new cost increase, as they receive notifications from fuel wholesalers about price revisions in line with global events, as well as a possible price increase of at least 15 percent.
In Latvia’s largest fuel station networks, the average price of diesel fuel has increased by approximately 25 percent since February 28 of this year, following the escalation of the conflict in the Middle East, even as the price of 95-octane gasoline has increased by 7-9 percent. The situation underscores the vulnerability of regional transportation networks to global geopolitical events.
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