Alexela executive suggests no fuel shortage in store for Estonia

Price of fuel at an Alexela filling station.
Price of fuel at an Alexela filling station. Source: Siim Lõvi /ERR

Estonia should not experience a fuel shortage this winter, and while increased demand could hike the price of diesel, that of gasoline should remain more or less where it is now, Alexela board member Tarmo Kärsna said.

"Our partner in Lithuania, refiner Orlen, has told us that there should not be shortages, that they can perform their contracts," Kärsna said on the "Vikerhommik" morning show on Monday. "We can say today that supply chains are operational and there are no signs to suggest we should be worried. Estonian orders will be filled, our suppliers have told us," Kärsna offered.

"But considerable demand for diesel is bound to manifest in future prices," he added.

"Many have even decided to use diesel for heating. This has caused demand to grow. Secondly, Europe has still not managed to replace Russian diesel. European refineries cannot match the volumes that used to come out of Russia. That is the other factor driving demand and keeping reserves modest," the Alexela board member said.

The price of gasoline, which fell towards the beginning of fall as a result of cooling demand, is affected by OPEC's recent decision to dial back production," Kärsna remarked.

"The oil states decided that they fear a recession that requires production to be cut, which delivered another spike in the price of crude and final products. Right now, the price of gasoline is stable at around €1.92 per liter and there is lower demand, at least in winter. I do not believe we will see a major price hike here," he said.

Kärsna added, however, that expecting to see prices drop to €1.3 per liter again is in vain as that is made impossible by the green transition.

People buy less fuel but do so more often

Kärsna said that fuel consumption is down 10 percent and that people buy less fuel at once but visit gas stations more often as a result.

"Individuals have cut fuel use by around 10 percent, with public transport more popular – a relative took the train from Viljandi to Tallinn the other day and said that people were standing after Türi. Trains are overcrowded and coaches full. People have clearly started to prefer public transport over cars," he said.

"We see that people refuel their vehicles more often, buying less fuel at once. Because other prices are going up as well, expenses are spread out and filling the tank in one go avoided," Kärsna said in terms of consumer behavior.

He added that the average customer buys around 20 liters of gasoline in one go. This means that gas stations' price difference of 1-2 cents amounts to no more than €0.5 per purchase.


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Editor: Marcus Turovski

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