diff --git a/java/java-impl/src/com/intellij/codeInsight/template/postfix/templates/editable/JavaEditablePostfixTemplate.java b/java/java-impl/src/com/intellij/codeInsight/template/postfix/templates/editable/JavaEditablePostfixTemplate.java
index 4eb2e5b58f6b..45c0eed96f43 100644
--- a/java/java-impl/src/com/intellij/codeInsight/template/postfix/templates/editable/JavaEditablePostfixTemplate.java
+++ b/java/java-impl/src/com/intellij/codeInsight/template/postfix/templates/editable/JavaEditablePostfixTemplate.java
@@ -10,13 +10,12 @@ import com.intellij.openapi.util.Condition;
 import com.intellij.pom.java.LanguageLevel;
 import com.intellij.psi.PsiElement;
 import com.intellij.psi.PsiExpression;
+import com.intellij.psi.PsiExpressionStatement;
 import com.intellij.psi.PsiFile;
-import com.intellij.psi.PsiLiteralExpression;
 import com.intellij.psi.util.PsiTreeUtil;
 import com.intellij.psi.util.PsiUtil;
 import com.intellij.refactoring.introduceVariable.IntroduceVariableBase;
 import com.intellij.util.Function;
-import com.intellij.util.ObjectUtils;
 import com.intellij.util.containers.ContainerUtil;
 import org.jetbrains.annotations.NotNull;
 
@@ -139,10 +138,11 @@ public class JavaEditablePostfixTemplate extends EditablePostfixTemplate {
   @NotNull
   @Override
   protected PsiElement getElementToRemove(@NotNull PsiElement element) {
-    if (element instanceof PsiLiteralExpression) {
-      return element;
+    PsiElement parent = element.getParent();
+    if (parent instanceof PsiExpressionStatement) {
+      return parent;
     }
-    return ObjectUtils.notNull(element.getParent(), element);
+    return element;
   }
 
   @NotNull
diff --git a/java/java-tests/testData/codeInsight/template/postfix/templates/arg/localVariable.java b/java/java-tests/testData/codeInsight/template/postfix/templates/arg/localVariable.java
new file mode 100644
index 000000000000..70318ec490fe
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/template/postfix/templates/arg/localVariable.java
@@ -0,0 +1,6 @@
+public class Foo {
+  void m(boolean b) {
+    String s1 = "";
+    String s2 = s1.arg<caret>
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testData/codeInsight/template/postfix/templates/arg/localVariable_after.java b/java/java-tests/testData/codeInsight/template/postfix/templates/arg/localVariable_after.java
new file mode 100644
index 000000000000..76ca8c977368
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/template/postfix/templates/arg/localVariable_after.java
@@ -0,0 +1,6 @@
+public class Foo {
+  void m(boolean b) {
+    String s1 = "";
+    String s2 = functionCall(s1<caret>)
+  }
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInsight/template/postfix/templates/ArgumentPostfixTemplateTest.java b/java/java-tests/testSrc/com/intellij/java/codeInsight/template/postfix/templates/ArgumentPostfixTemplateTest.java
index ba01e0621a94..5ef7a82844ff 100644
--- a/java/java-tests/testSrc/com/intellij/java/codeInsight/template/postfix/templates/ArgumentPostfixTemplateTest.java
+++ b/java/java-tests/testSrc/com/intellij/java/codeInsight/template/postfix/templates/ArgumentPostfixTemplateTest.java
@@ -6,6 +6,14 @@ import org.jetbrains.annotations.NotNull;
 
 public class ArgumentPostfixTemplateTest extends PostfixTemplateTestCase {
   public void testSimple() {
+    doArgTest();
+  }
+  
+  public void testLocalVariable() {
+    doArgTest();
+  }
+
+  private void doArgTest() {
     TemplateManagerImpl.setTemplateTesting(myFixture.getProject(), getTestRootDisposable());
     myFixture.configureByFile(getTestName(true) + ".java");
     myFixture.type("\tfunctionCall\t");