The Estonian government, during a cabinet meeting, decided to cancel the planned tax increases on energy carriers that were set for May. This decision was made in response to the rising fossil fuel prices stemming from the geopolitical tensions due to the US-Israel conflict with Iran. Prime Minister Kristen Michal emphasized that in times of uncertainty and increasing prices, it is not reasonable to maintain previous decisions that could impact the economy negatively.

In addition to canceling the tax increases, the government is also engaging in broader international efforts to stabilize energy prices. It plans to participate in initiatives led by major countries aimed at releasing oil reserves into the market. This strategy is intended to increase supply and curb further price hikes that could burden consumers and the economy. Michal stated that the Estonian Oil Reserves Center would be involved in these operations, indicating a proactive approach to manage energy costs.

The cancellation of the tax increases could have significant budgetary implications. According to estimates from the Ministry of Finance, this decision might lead to a reduction of up to 40 million euros in state revenue. This raises questions about the government's ability to fund other essential services and highlights the challenges faced in maintaining fiscal stability amidst fluctuating global energy markets.