Gasoline consumption falling as prices rise — Estonian Oil Association

Fuel prices at a Tallinn filling station, June 1 2022.
Fuel prices at a Tallinn filling station, June 1 2022. Source: Siim Lõvi / ERR

Last month gasoline consumption fell in Estonia and the trend is likely to continue this summer. The country's gas prices are the eighth highest in Europe and will not fall in the foreseeable future, Mart Raamat, the head of the Estonian Oil Association said on Friday.

On Wednesday (June 1), the price of 95 octane gasoline rose to an all-time high in Estonia at €2.119 per liter.

At the start of May it can be seen that consumption fell by between 7 and 10 percent and continues to do so, said Raamat, adding final data has not been compiled yet.

"As prices rose at the end of May, the same trend can be expected to continue through to the end of May," Raamat said.

Consumption usually rises in summer by approximately 20 percent, but it is not expected to do so this year, he said.

Additionally, forecasts across Europe are alarming, he said.

"The head of the International Energy Agency also warned this week that it will be a difficult summer for motor fuel suppliers in Europe because there is less refining capacity. Demand for finished products has remained high and all of this will not get easier in the near future," the association head said.

Estonia's gas prices among highest in Europe

At the end of May, Estonia has the eighth-highest price in the European Union for 95 octane gasoline, data shows. Newer data may put it even higher, Raaamat said.

Denmark (€2.410), Finland (€2.368), Greece (€2.277), the Netherlands (€2.225), Germany (€2,193), Sweden (€2.169) and Portugal's (€2.055) prices are higher than Estonia, EU data show. But Germany and Sweden cut excises duties this week.

The EU average price at the end of May was €1.902.

"Estonia is almost the only country where the government has done absolutely nothing to ease the price pressure on people. All other countries have either taken or are taking steps. Therefore, in April-May we were in the European Union's top eight, today we are probably in the top six," he said.

Raamat believes the government could reduce the excise duty on gas by 20 cents, which would lead to a drop of 25 cents, including VAT, at gas stations.

"A recent example from Germany showed that a reduction in excise duty immediately reached sales prices. Estonia has a similar example from 2020, when the government decided to reduce excise duty on diesel fuel," he said.


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Editor: Helen Wright

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