Diesel prices to fall from Friday after excise cut kicks in
Diesel excise duties will fall from Friday, May 1, by €0.145 per liter, meaning that diesel fuel per liter may fall to as low as €1.054 from then.
The government, as part of its raft of measures aimed at combating the coronavirus pandemic and its economic effects, recently opted to cut diesel fuel excise duty from €493 to €372 per 1,000 liters, bringing it in line with the level in Lithuania and closing a competitiveness gap between diesel fuel in Estonia and the other two Baltic States which often led to sales going outside the country.
The move is expected to have a knock-on effect on other prices too. While the excise cut had been in the offing for some weeks, fuel retailers were keen to sell off existing stocks at their stations which had been purchased at the higher, previous excise duty rate.
Raimo Vahtrik, sales director at Circle K Eesti, says his company has stocks in the fuel tanks hwhich ave been bought in with a higher excise duty rate, but nonetheless the filling station chain has decided to lower the excise duty rate from Friday, I.e to the new rate of €372 per 1,000 liters, or €0.145 per liter inclusive of VAT.
The cut was not the only factor in at-pump prices, which Vahtrik could not say precisely what prices would be following the excise cut starting Friday.
"As prices of motor fuels depend not only on excise duty, but also on the cost price of the product - both fossil and biofuel – as well as the competitive situation, we do not consider it possible today to assess their possible impact on Friday's retail price," Vahtrik said.
Neste Estonia's retail manager Kristi Pari agreed it was not possible at the moment to say what the retail price of fuel will be at the gas station from May 1, because the final price depends on the movement of the purchase price in the coming days.
Neste has, however, promised that, like other fuel sellers, it would pass on the price gain caused by the drop in excise duty to the consumer, ie lower the price of a liter of diesel fuel by €0.145 per liter from the beginning of the month.
Last week, fuel prices fell in Riga and Vilnius, making diesel fule prices at pump, at €1.199 per liter, 30.5 cents pricier than in Riga and 32.4 cents more than in Vilnius.
The cut does not affect gasoline prices, which in any case have been falling in recent weeks due to the global oil price slump.
Editor: Andrew Whyte
