As of Monday evening, the price of a liter of 95 gasoline cost €1.439, the highest in recent months as prices continue to creep up from the low experienced in early 2020.

Meanwhile, 98 gasoline matches the record level for Estonia of €1.459 per liter, first set in 2012.

Diesel, not only affected by world oil prices too but also the subject of an excise duty cut in Estonia last year, has also seen inflation. While a liter of diesel cost less than a euro for much of the second half of 2020, it now costs €1.209 per liter at pump.

Piret Miller, CEO of one fuel retailer, Olerex, said that this trend will continue as further crude oil price rises are on the way.

Miller said: "At the moment, we can see that prices are rising, and major international traders are forecasting a crude oil price of as high as US$100 per barrel this year."

"Currently, the price is US$73-74. So it's also possible that prices will rise on the Estonian market as well."

Early 2020 saw a period of negative world oil prices and as a result historic lows, exacerbated by the arrival of the pandemic, but the situation has transformed since then.

Risto Sülluse, marketing and communications chief at Neste fuel retailers, told ERR that demand and supply as economies emerge from the pandemic is at issue; since the global crude oil balance is likely to remain negative in the coming weeks, it could be expected that prices will continue to rise. 

"Global demand for crude oil has risen almost back to pre-pandemic levels, and this has also led to higher finished product prices," he said.

Uncertainties over the virus and any possible resurgence mean that it is difficult to forecast exactly what will happen, he added, noting that the second wave of COVID-19 in the U.K. hit the country hard after it had ended lock-down and reopened the economy, while crude oil prices may also be temporarily influenced by US decisions on sanctions on Iran, he said.

Alexela board member Tarmo Kärsna told ERR that world gasoline prices rose by as much as 60 percent between November 2020 and May 2021.

He said: "With the arrival of the news of vaccines, in fall 2020, global fuel prices began to rise. In the winter, and the spring of 2021, vaccination picked up worldwide, accompanied by strong easing of restrictions in April and May, leading to a sharp increase in demand," he noted.

Alexela was one of several high-profile recipients of funds from state credit agency KredEx, obtaining a €37-million loan as part of a state support packaged issued last year for companies demonstrably hit by the pandemic and its restrictions.

This is likely to continue as vaccination progress continues and with it, increased mobility, to the extent record prices are likely in Estonia later in summer, he said.

Figures also support this – data from the domestic Tax and Customs Board, the MTA, shows 25 percent year-on-year growth to April 2021, and 8.2 percent to May.

Other factors include a fall in U.S. inventories, and an agreement late last year by Organization of the Petroleum Exporting Countries (OPEC) countries to start boosting production by 500,000 barrels per day, beginning in January.

--

Follow ERR News on Facebook and Twitter and never miss an update!