The Communications Regulatory Authority (CRA) has completed the examination of the request of the Lithuanian Post to change the maximum tariffs of the universal postal service. Taking into account the costs of provision of the universal postal service incurred by Lithuanian Post in 2022, the CRA approved an increase in the maximum universal postal service tariffs, however, more moderate than proposed by Lithuanian Post.
“It is important to note that we are approving the maximum tariffs for the universal postal service, while Lithuanian Post has the right to apply lower tariffs, which are in line with the interests of the users, the nature of the postal activity and the costs incurred,” emphasises Darius Kuliešius, Deputy Chair of the CRA Council.
Taking into account the changing postal market trends and rising costs of Lithuanian Post, the maximum possible tariffs for correspondence items sent in Lithuania are being increased by about 22% on average, while the parcel tariff is being reduced by 10% per parcel but increased by 56% per kg.
The CRA resolution also proposes to increase the average tariff rate for the processing of international parcels in Lithuania by 56%, to decrease the tariff rate per parcel by about 31% and to increase the tariff rate per kg by about 77%. There is no change to the assessment fee for international parcels and parcels sent in Lithuania.
The proposal of Lithuanian Post to eliminate non-priority correspondence sent in Lithuania, leaving only priority correspondence, was also approved.
“A uniform process for correspondence items will allow Lithuanian Post to carry out the activities of the universal postal service more efficiently, partially reducing the costs necessary for its provision,” explains D. Kuliešius.
Steadily rising costs
As the Government’s authorised entity to provide the universal postal service, Lithuanian Post is subject to certain requirements related to the characteristics of the postal network, such as the provision of postal service outlets to at least 90% of the addresses of all users in the territory of Lithuania.
“This undoubtedly means high fixed costs for the postal service provider. On the other hand, the sending of letters as a universal postal service in Lithuania declined by 65% between 2019 and 2022, and by as much as 40% in 2022 compared to 2021. Such statistics inevitably lead to rising service provision costs, which have a direct impact on the level of the maximum tariffs set.
In addition, the provision of a universal postal service that meets the quality requirements even to users living in the remotest parts of Lithuania also incurs costs, which may generate a loss compensated from the state budget as the universal postal service volumes decrease”, – D. Kuliešius justifies the decision to increase the maximum tariffs for the universal postal service with statistics.
The rising costs incurred by Lithuanian Post were also due to the increase in electricity, gas and fuel prices in 2022, as well as to the country’s average annual inflation of almost 19%.
“All these unfavourable conditions for business have a direct impact on the setting of the maximum tariffs for the universal postal service, in order to ensure the financial stability of the universal postal service provider Lithuanian Post,” notes D. Kuliešius, Deputy Chair of the CRA Council.
You can read the CRA resolution here.
Universal postal service – a postal service of the quality prescribed by the legislation, which shall be provided at an affordable price throughout the territory of the Republic of Lithuania to all users who wish to receive such a service. The universal postal service in Lithuania consists of the collection, sorting, carriage and delivery of all registered and insured postal items (sent in Lithuania and to other countries), correspondence items up to 2 kg, parcels up to 10 kg, and postal items up to 20 kg received from other EU Member States or countries of the European Economic Area. The universal postal service does not include the sending of bulk mail under a separate agreement with the sender, nor does it include a postal service with added value (e.g. a postal service provided through couriers or post offices, the delivery and hand-delivery of which can be tracked in real time). By the Resolution of the Government, Lithuanian Post is obliged to provide the universal postal service of the specified quality throughout the territory of the Republic of Lithuania until 2027.
It should be noted that only the universal postal service (essentially provided in post offices or by dropping letters in letter boxes in public spaces) is regulated, while other services (e.g. those provided through couriers, post offices, or individual bulk mail agreements) are competitively priced.
According to the latest data for the first half of 2023, the revenues of Lithuanian Post from the provision of the universal postal service account for about 24% of the company’s total revenues from postal services.
Updated on 2024-03-15