Fuel sales halved on year as emergency restrictions bite

Filling station.
Filling station. Source: ERR

Fuel sales have continued to fall in the wake of the coronavirus pandemic, retailers say, with gasoline purchases down by as much as 50 percent on year. Sellers say that it is difficult to say whether the fall has bottomed out yet.

"Sales in March have been on a steady downward trend for the past two weeks, and it is difficult to say whether the bottom has been reached yet or not," said Cirkle K CEO Kai Realo.

Gasoline sales, which are the main fuel used in private consumption in Estonia, have been the most affected.

"Last week, we had already seen around a 50 percent drop in gasoline sales compared with the same week this time last year. This is understandable, since people have either no need or no possibility to go anywhere, due to restrictions on movement, school closures and working from home," Realo said.

South Estonia an exception

Diesel sales, which have a higher share among business customers, have not fallen by as much, though have still fallen by around 30 percent over the same period, retailers say.

One exception to this is South Estonia, which has actually seen a rise in diesel sales, again due to restrictions imposed in the emergency situation.

"It is interesting to see a smaller general decline, in fact practically non-existent, in South Estonia, where both private individuals and business customers have been filling up as significant differences in excise taxes [over the border in Latvia] have made fuel cheaper.

"Now that these people can't cross the border, sales in these areas are suddenly growing rather than falling, "Realo went on.

Fuel company Alexela is seeing similar overall declines.

"When comparing the sales of the past two calendar weeks with the pre-crisis period, it is clear that fuel sales have fallen by 30-40 percent," said Alan Vaht, board member at AS Alexela.

"The introduction of additional restrictions ... has further reduced fuel consumption, so any movement restriction has a direct impact on consumption, including fuel consumption, which is logical. If peopleare stuck in quarantine at home, and working from home, they are not using fuel," he added.

Wholesale/retail price differences

Some fuel firms publish their price differentials between wholesale and retail fuel.

Finnish company Neste is selling wholesale gasoline 95 at €0.95 per liter, compared with €1.249 per liter at retail.

When comparing Neste's retail and wholesale prices, gasoline is 95 30 cents cheaper, currently paying $ 0.95 per liter. At retail, gasoline 95 is priced at € 1,249.

Talvine B7 diesel ranges in price from €1.025 to €1.035, depending on the category. At retail, the price of a liter of diesel from the company is €1.239, a difference of around 21 cents.

Wholesale prices at Olerex are €1.050 for gasoline 95, and €1.040 per liter for diesel. Retail prices are around 20 cents higher, according to ERR's online news in Estonian.

Cirkle K does not deal in wholesale fuel and Alexela keeps its price differential between retail and wholesale fuel confidential.

Fuel prices themselves have continued to fall both as a result of plummeting global oil prices, and the economic effects of the coronavirus pandemic.

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Editor: Andrew Whyte

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