Gas prices starting to rise, diesel stays below euro a liter

Gas, diesel and LPG prices as of Tuesday. Source: Siim Lõvi /ERR

Gasoline prices in Estonia have started to rise again after a slump through spring sparked by the fall in world oil prices and the coronavirus pandemic. Diesel remains at the same level.

On Tuesday, the price of 95-octane gasoline rose €0.03, to €1.229 per liter, ERR's online news in Estonian reports.

Gas prices

At the beginning of April, 95-octane gas cost €1.249 per liter at pump, falling to €1.199 a week later, and in May, it stood at €1.149 per liter.

Diesel prices

Diesel dipped below a euro per liter in late April, having been €1.239 per liter at the beginning of that month. In the case of diesel, excise duties fall by 25 percent on May 1, which was also a factor. Diesel is still €0.999 at pump as at the time of writing.

Gas price rise result of recovery

Indrek Sass, head of motor fuel pricing at filling station chain Circle K, says the recent rise in petrol prices is due to sustained rises in purchase prices on the world market – 15 percent for gasoline and 21 percent for renewable fuels.

Recovery and normalization after the COVID-19 pandemic, including state support measures, havae also influenced prices, he said.

Board member at fuel company Alexela Alan Vaht concurred, saying that at-pump prices have been catching up with the rise in the world market at an even slower rate than they did with the fall in global prices in spring.

Diesel may remain below the euro for some time

While the global price of diesel has risen by over 10 cents, this has not been passed on to the consumer in Estonia. In fact, Estonia is the cheapest in the Baltics for diesel now – whereas in spring diesel was 3-5 cents per liter dearer than in Latvia, according to Alan Vaht.

This had previously led to Estonia losing custom to its southern neighbor, particularly with trucks.

Now, competition between filling stations is keeping the price below a euro a liter, Vaht said.

"No one wants to take the first step, but at some point, when someone does, it is inevitable that other market participants will go along with it," he said, adding that customers could be satisfied with diesel prices in Estonia while that situation lasts.

World market prices for fuel in general may fall again in future, he added, particularly if a second COVID-19 wave strikes; in any case, it would halt a rise in prices, he went on, noting localized coronavirus outbreaks in the Central and Eastern European region lately, including in Croatia and the Czech Republic.

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Editor: Andrew Whyte

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