For several months, the price of fuel at gas stations has remained unchanged. The CEO of the Estonian Transport Fuels Union (Transpordikütuste ühing), Mart Raamat, said that this is due to the long-term stability of the global oil price. However, this is not a historical precedent, and the future may bring higher fuel prices.
Petrol 95 has been priced between €1.699 and €1.7 per liter and diesel between €1.449 and €1.5 per liter at Estonia's main gas stations for several months.
Mart Raamat, the chief executive officer of the Estonian Transport Fuels Union, explained to ERR that the reason fuel prices have remained stable for so long is because the underlying global oil price has been fluctuating within the same price range for the past two to three months.
The price can fluctuate by a few euros during the week, but the price range is stable at between 72 and 77 dollars per barrel. This has maintained pricing stability because the global fuel and oil prices have remained unchanged, according to Raamat.
Tarmo Kärsna, Alexela's head of leasing division in Estonia, said that the last few months have been calm on the global fuel markets, which is reflected in tank prices. However, this period seems calm in comparison to the previous year, when prices frequently fluctuated within a few days.
Kärsna explained that the fuel prices at all Estonian gas stations are nearly identical because Estonia is a small country with intense competition.
Our market has the maximum concentration of gas stations in the region, making it the most competitive in the area. "However, as a loyal customer, consumers in Tallinn, Pärnu and Võru expect similar prices from their fuel company, with the possibility of beating the price," Kärsna said.
He said that one of the primary topics at the OPEC+ energy ministers' summit in early June was Saudi Arabia's wish to maintain high oil prices, which is why they pledged to cut production by one million barrels, or about 10 percent, by July.
Saudi Arabia hoped to raise the price of oil above $80 per barrel with this decision but it is unclear yet if prices will begin to rise in early July, he said.
"It will also depend on news about the world's largest oil consumers, the Chinese and U.S. economies, as well as what the European and U.S. central banks do with interest rates," he explained.
Prices are more likely to move upwards in the future
Raamat said that it is more likely that the price of fuel will increase in the near future, as summer is a time when people travel and take vacations throughout the western hemisphere, which increases demand for motor fuels.
"It is unclear, however, whether the economic crisis in Europe and the United States will also affect vacationing habits. The oil and petroleum markets have shown that predicting price fluctuations is exceedingly difficult."
"If Saudi Arabia withdraws a significant amount of oil in July and oil markets do not respond with a significant price increase, then forecasting has become exceedingly difficult and there is a great deal of emotion involved," he said.
The Alexela spokesperson also mentioned the rise in summertime demand and the possibility of production disruptions.
"As you may recall, fuel prices increased last year due to a strike in France. In a global context, the performance of the Chinese economy, however, is the most influential factor on prices," he said.
Long-term, he added, the prices of fossil fuels are rising due to rising production costs, rising excise taxes and additional carbon dioxide taxation.
Kärsna recalled the year 2020, when diesel fuel excise duty was reduced and the price per liter reached €0.999, where it remained for four months; however, the fuel market saw longer periods of stability also prior to 2020, before the pandemic and the war.
In late autumn of last year, the Estonian Competition Authority launched a survey of the competitive landscape in the retail and wholesale markets for vehicle fuels.
Regarding the current status of the survey, Marili Tammeorg, specialist at the competition authority, said, "The analysis is ongoing, and the final report will be released within 12 to 18 months; we will keep the public informed accordingly."
The study investigates the profitability of fuel retailing and sales volumes of various fuel types, retail discounts and volumes of fuel sold at discounts, wholesale sales revenues and volumes, compliance with bio-addition requirements, fuel stockholding and the effect of stock levels on price, as well as fuel supply sources and price agreements.
Editor: Karin Koppel, Kristina Kersa