Falling August crude oil prices don't mean cheaper fuel to consumer yet
World crude oil prices may have fallen slightly between July and August, but the fall is unlikely to reach retail prices at pump, partly because the US dollar's appreciating against the euro has offset the impact of the oil price fall, one major retailer in Estonia says.
Indrek Sassi, motor fuel pricing manager at Circle K, said Thursday that: "World crude oil prices have been volatile in August. The highest price of Brent crude oil stood at US$72.89 per barrel, while the lowest figure was US$65.18 per barrel," adding that the average for the whole month was US$70.
A fall in crude prices also takes at least a week to percolate through to the consumer in Estonia, he added.
"In the event of a fall in global market prices, we are ready to immediately reduce retail prices at service stations as well, but it must be understood that the fall in prices usually reaches the Estonian market with a delay of 7-10 days. This is mainly due to the fuel reserves held at filling stations," Sassi went on
Gas prices in Estonia are the highest in the Baltics, partly due to higher excise duties, though the reverse is the case for diesel, which is still cheaper in Estonia than in Latvia or Lithuania, after last year's excise duty cut.
Gas averages €1.453 per liter, diesel €1.220 per liter. Diesel prices actually dipped below the one-euro-per-liter mark through much of the second half of 2020, mainly due to the excise duty cut.
Diesel had previously been more expensive in Estonia than in Latvia, leading to the loss of local custom as people headed south of the border to refill.
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Editor: Andrew Whyte