The right-wing government, in power since October 2022 and backed for the first time by the far-right Sweden Democrats, announced Thursday it would cut taxes on petrol by 1.64 kronor ($0.14) per litre and by 0.43 kronor ($0.04) on diesel, as of 2024.
The announcement comes amid concerns that the new government's climate policy is backsliding after years of pioneering efforts.
"The only thing this government's climate policy does effectively is increase emissions and make the climate crisis a reality," Greens Party leader Marta Stenevi told Swedish Radio late Thursday.
"That is of course totally unacceptable."
Stenevi instead called for incentives to get consumers to switch to electric cars.
The Centre Party said the tax cuts should be directed at those most in need.
"Don't give this money to everyone. Give three or four kronor per litre to those who live in rural areas and can't use public transport," the party's spokesman on economic affairs Martin Adahl told daily Dagens Nyheter.
Energy, Business and Industry Minister Ebba Busch said the measure, which is expected to cost the state 6.5 billion kronor ($583 million), was necessary to help families struggling with inflation stuck around 10 percent for the past year.
"It's too expensive to be a Swede," Busch told Swedish Radio.
"We need to do what we can to make it cheaper to live in this country, for consumers, for families and for our farmers," she said.
"We are using all the tools we have in our toolbox to try to push down these fuel prices that are also having an effect on inflation."
The government has previously announced that a requirement to mix biofuel in petrol and diesel will be reduced from 30.5 percent to the EU minimum of six percent as of 2024.
The combined effect of the tax cut and the biofuel requirement is estimated to be 2.60 per litre for petrol and six kronor for diesel.
Earlier this year, an independent agency tasked with reviewing Swedish climate policy warned that "instead of rapidly reducing emissions, the changes decided and announced (by the government) so far will, on the contrary, increase emissions in the near future."
"That would be the first time in at least two decades that changes in Sweden's national policy lead to increased emissions of greenhouse gases," the Swedish Climate Policy Council said.
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