Individual fuel consumption continues decline in October

Pumps at a gas station.
Pumps at a gas station. Source: Ken Mürk/ERR

Last month, gas station sales of gasoline, consumed primarily by private individuals, fell by 5.3 percent on year. In the first ten months of 2022, fuel consumption has fallen by 7.6 million liters.

These sales figures aren't surprising, said Estonian Oil Association CEO Mart Raamat, as high fuel prices clearly impact private individuals' consumption decisions in particular.

"For example, the increase in liquefied petroleum gas (LPG) sales volumes was 21 percent in October," Raamat said. "While the price of gasoline in October was 35 cents more expensive [per liter] than last year, the sales price of LPG remained virtually unchanged. This indicates that people's need to move hasn't gone anywhere, and that people are seeking cheap solutions."

The fuel sector representative said that gasoline sales figures this year have fallen short of those of the previous two years as well, in which time some months were impacted by sweeping restrictions on movement.

"The majority of European governments at least met their people halfway during the summer months and reduced fuel taxes," he said. "The Estonian government swam against the current on this one and left consumers on their own in the price increase. As 80 percent of gasoline is consumed by private individuals, sales numbers that have clearly decreased on year demonstrate that people in Estonia could not accept the increase in fuel prices."

Diesel fuel figures at the pump in October, meanwhile, remained steady on year. Raamat explained that diesel fuel sales figures have been volatile in general in recent months.

"Some three times more diesel fuel is consumed in Estonia than gasoline, and the vast majority of diesel fuel is used in business," he said. "There are several factors that can impact diesel fuel consumption during one month or another, from crop yields to snow conditions. On year, diesel fuel consumption has remained similar to last year's — which is also a good reflection of the stagnation of the economy as well."

A draft amendment to the Alcohol, Tobacco, Fuel and Electricity Excise Duty Act currently being handled in the Riigikogu would postpone an excise duty increase on diesel fuel currently scheduled for next year. Raamat, however, believes that the state should review its overall transport taxation logic.

"Compared with the entire rest of the developed world, Estonia's transport tax policy is based exclusively on taxing fuel consumption," he highlighted. "That, however, leads to a relatively greater burden having to be borne by our business and lower-income population. All data likewise points to the fact that this type of approach provides absolutely no climate or environmental benefit whatsoever. This could certainly be food for thought for political parties as well ahead of the 2023 elections."

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Editor: Aili Vahtla

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