Sweden has proposed a temporary cut to petrol and diesel taxes from May to September 2026 to ease rising fuel costs caused by the war in the Middle East, with adjustments for agricultural diesel and future tax indexing.
The Swedish Ministry of Finance has proposed a temporary reduction in energy taxes on petrol and diesel to the minimum levels allowed under the EU Energy Taxation Directive (2003/96) for the period 1 May to 30 September 2026 as a result of the ongoing hostilities in the Middle East.
Key reductions include:
- Gasoline (Environmental Class 1): Energy tax cut of 82 öre per litre, bringing the combined energy and CO2 tax to 3.97 SEK per litre.
- Other gasoline classes: Same reduction, except for alkylate gasoline, which is reduced by 34 öre per litre.
- Diesel (Environmental Class 1): Energy tax reduced by 319 SEK per cubic metre, with a total combined tax of 3,642 SEK per cubic metre.
- Other diesel classes: Reduced by the same amount.
- Diesel for professional agricultural, forestry, and aquaculture use: Energy tax set at 831 SEK per cubic metre for 1 May–31 December 2026.
The bill also outlines that energy and CO2 tax rates for 2027 will be calculated using forecasted indexation based on levels that would have applied as of 1 August 2026, had the temporary reduction not been implemented. Legislative amendments are scheduled to come into force on 1 May 2026, 1 October 2026, and 1 January 2027.
Economic analysis suggests the proposal would reduce government revenue by around SEK 1.64 billion in 2026. Consumer savings are estimated at 230 SEK for an average gasoline car owner (driving 9,000 km/year) and just under SEK 120 for a diesel car owner (14,000 km/year). The policy is expected to marginally increase CO2 emissions by nearly 0.1 million tons, while boosting the purchasing power of lower-income households and rural residents.
The Swedish Tax Agency will implement the multiple tax rate changes and update IT systems to manage the transitions. The temporary nature of the reductions is designed to limit long-term impact on energy taxation while providing short-term relief from geopolitical-driven fuel price increases.
