Environmental compliance behind highest fuel prices in the Baltics

The price of diesel on April 30 Source: Anna Aurelia Minev/ERR

The price of 95-octane gasoline dropped by five cents to €1.149 per liter in Tallinn, which is 16.5 cents more expensive than in Riga and 21.6 cents more expensive than in Vilnius. In addition to higher excise duty, one reason for Estonia's higher price is the Latvian and Lithuanian fuel suppliers' decision to pay a small fine instead of meeting environmental requirements.

From this year, petrol stations in Estonia are obliged to provide petrol with 10% bio-ethanol and the Atmospheric Air Protection Act (2017) obliges fuel suppliers to supply fuels with a six percent reduction in greenhouse gas emissions.

According to Alexa Estonia board member Alan Vaht, a major component in comparing Estonian fuel prices to those of the other Baltic states is that Latvia and Lithuania have not invested in fulfilling the obligations of reducing greenhouse gas emissions.

If Estonian fuel suppliers might be fined €10 million for infringement of the directive, the respective fine might amount to a couple of thousand euros in Latvia and Lithuania.

This is why fuel suppliers have decided to postpone investments into fulfilling the directive and keeping their costs and consumer prices low. Vaht said that another reason for Latvia's cheaper fuel price is that a price war that happened at the beginning of the year.

The excise duty rate for gasoline is €0.563 per liter in Estonia, compared to €0.509 in Latvia and €0.466 in Lithuania. The EU average is €0.529.


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Editor: Anders Nõmm

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