According to Urmas Kuus, sales director of Terminal Oil, the company's retail prices for motor fuel are largely dependent on purchase costs and taxes, with regional competition having little to no effect.

Tarmo Kärsna, a member of Alexela's management board said, that the fuel market is waiting for a decision by OPEC (Organization of Petroleum Exporting Companies) on December 4, regarding a potential increase in output. The price cap on Russian oil, which comes into force on December 5, will also have an impact

"On the one hand, it has been said that OPEC is planning to increase production, even though, a month ago they decided to cut back. Saudi Arabia, however, has claimed, that no such plan has been discussed," Kärsna said.

The market expects demand to fall in winter, in light of the recession and corona cases in China. Fears of a Russian embargo in recent months have also caused imports from there to be as high as possible. 

According to Kärsna, fuel prices will go down in winter as demand falls. "People are travelling less. It's the same for diesel – a recession. Producers have adapted quickly to the market, and found new raw materials, so production (levels) have been sufficient. In Estonia, fuel sales volumes are down somewhere between 7-10 per cent compared to last year, which is a big drop really. However, the same downward trend can be seen in the rest of the world, which is also easing the demand," he said.

However, a global diesel shortage could still be a threat this winter, with an embargo on Russian oil products set to come into force from February. "A number of countries, including Estonia, already decided in mid-summer, and before, to give up Russian diesel," Kärsna said.

However, fuel prices are unlikely to remain at their current levels for long. "For gasoline, they could stay in the same range, between €1.8 and €1.9 (per liter). For diesel, I'd say, they could stay at the same level in December, but will definitely go up in winter," Kärsna explained, adding that a lot will depend on the price of natural gas.

"At the moment, heavy fuel oil and diesel are, for many companies and heat producers, an alternative to natural gas. In Estonia, too, a number of heat producers have asked for special permits (to use these alternatives). When the coldest part of winter comes and the price of natural gas goes up, demand for diesel will also increase a lot," he said.

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