Price of 95 gasoline reaches new all-time record

The prices of gasoline and diesel on January 12 2022.
The prices of gasoline and diesel on January 12 2022. Source: Siim Lõvi /ERR

As of Wednesday morning, the price per liter of 95 gasoline in major fueling stations rose to €1.599, which is an all-time record. Fueling chains say there are many reasons for the price inflation.

Neste marketing and communication manager Risto Sülluste told ERR that the main reasons for the increase in 95 prices is the general electricity inflation and recent events in Kazakhstan.

"The exchange prices of finished products have increased for about a week now, which has been caused by the price increase of crude oil. The prices of crude oil are affected by the growing concerns over shipments from Kazakhstan," Sülluste said.

"Kazakhstan produces 1.8-1.9 million barrels of crude oil a day, which is comparable to Norway's production around 1.7-2.0 million barrels and it exports more than half of its production to Europe. Since current political unrest has negatively affected the production of oil on Tengiz Field, oil exports from Kazakhstan will likely decrease," he added.

Sülluste noted that it is hard to predict how the situation will go forward and how political unrest in the region will affect prices.

Circle K motor fuel pricing manager Indrek Sassi also said the reason for the increase in retail prices is the prices on the world exchange, which have constantly gone up since December 21.

"The Brent crude oil price was at $72 per barrel on December 20, but that increased to $80 by the end of December. The trend has been a growing one to start January, as well, prices closed at $84 per barrel on Tuesday," Sassi said.

He noted that analysts do not see a price decrease coming anytime soon, analyses even show the inflation to continue. The Circle K pricing manager added that while gasoline prices are at an all-time record, Estonian prices are competitive with its neighboring countries mainly because the diesel excise is on the same level as Lithuania's. He added that if the gasoline excise rates were the same for both countries, Estonia's per liter prices would be €0.12 cheaper.

Alexela board member Tarmo Kärsna said the reason for the recent price inflation is caused by the price of crude oil increasing on the world market and in refineries, which stems from the electricity and gas inflation.

"Crude oil is still affected by a slight deficit on the global market, since OPEC+ production capacities are growing gradually and high gas prices have caused a situation, in which it is cheaper to use fuel oil for heating, which has in turn increased demand," Kärsna said.

He noted that fuel prices are expected to grow at a slow pace. "At the same time, if the global demand for gasoline products was to drop and with that, the price of crude oil as the main input, as well, that would have a positive effect for the consumer through price stability or even a slight drop," the Alexela representative said.

At the start of this week, 95 gasoline cost €1.539 per liter in major fueling stations.

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Editor: Kristjan Kallaste

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