Economists from various banks in Latvia, including Citadele, have expressed concerns regarding the government's consideration of implementing fuel price caps. They argue that these caps may provide only temporary relief from rising fuel prices without addressing the underlying economic issues. The main economist at Citadele, Kārlis Purgailis, highlighted that while price caps may ease pressure in the short term, a better long-term strategy would be the flexible adjustment of excise taxes, which comprise a significant portion of retail fuel prices.

Purgailis pointed out that any government intervention in free market dynamics, such as price regulation, typically results in greater risks and long-term negative consequences than short-term benefits. He emphasized that fuel retailers should not be expected to compensate for rising prices, as a substantial part of the retail price (25% for diesel and 32% for gasoline) consists of excise tax. This highlights the significant role that government policy plays in regulating fuel prices and the potential need for reform in tax structures to alleviate financial pressures on consumers.

Additionally, Purgailis mentioned that the value-added tax (VAT), which accounts for 17% of the overall retail price, is also under state control. The flexibility in adjusting these taxes could allow for immediate changes to mitigate the impact of fluctuating fuel prices, advocating a more sustainable and effective approach to managing fuel costs in Latvia rather than resorting to strict price controls.