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Wednesday 23.08.2017 | Name days: Valgudis, Ralfs, Vitālijs
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Consumers benefit from fuel price wars only in short term

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUFuel traders wars are beneficial to consumers only in a short term, the Latvian Fuel Traders Association (LFTA) Chairman Mārtiņš Stirāns (Stirans) indicates in an interview to Latvijas Radio.

As reported in Estonia, Neste has started a price war, reducing fuel prices at unmanned fuel service stations below the wholesale price. Neste Estonia branch head Ivar Kohv points out the company is prepared for prolonged price war. It is planned to increase the difference between the fuel price at Neste unmanned fuel service stations and other fuel retailers’ prices.

Latvian fuel traders have not discussed a possible price war.

Stirans explains it is easier for major fuel traders to withstand the situation where the fuel retail price is lowered below the wholesale or procurement prices, as they have a strong parent company’s support. It creates problems for small fuel traders and they can leave the market, thus worsening the competitive situation.

Asked whether fuel trader price wars are expected in Latvia the LFTA head says, hopefully, not.

Stirans refrained from predicting fuel price developments in the nearest future, emphasizing it depends on the trends on the stock market. Although many recognize oil prices have been overestimated, the market is affected by the unrest in North Africa, as well as because speculators shifting from stock markets to resource ones.

LFTA Chairman acknowledges the price climb has reduced petrol consumption, while diesel sales have not changed significantly, because it is used more in commercial activities.

Stirans also points that people usually see fuel price surge, but do not pay attention to the price drop. Meanwhile, this week, following the trends in the global stock exchanges, fuel retail price was down 0.5 santims in Latvia.

Since last June fuel prices have risen more than 60% on the stock exchange, while fuel prices at refuelling stations – 19%, although from an economic point of view this increase had to comprise 30%. The gap between the wholesale and retail prices is declining steadily, while costs of maintaining the fuel service station, meet environmental requirements etc. are increasing. Fuel traders are covering these additional costs at the expense of revenues.

As reported, in early April Stirans took over the Chairman pos at the LFTA from Uldis Sakne.

The LFTA is a public organization founded in 1998, combining legal and natural persons in Latvia to promote fuel and other petroleum products trade.


  1. Kiky says:

    I notices the price drop, but sure it is up already!

    Thumb up 0 Thumb down 0

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