Latviski English По-русски
Sunday 23.09.2018 | Name days: Vanda, Veneranda, Venija

Economist: fuel prices to exceed lat in mid-2011

(+1 rating, 1 votes)

Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU

Fuel prices in Latvia could hover around 95 santims in the middle of the year, but in case of any disruptions in oil extraction, fuel costs could exceed one lat, according to AS SEB banka macroeconomic expert Dainis Gašpuitis (Gaspuitis).

The expert explains excise tax on fuel will be increased on June 1, but in terms of price fluctuations the effects will be felt after about three months, due to introducing fuel crisis reserves.

In this case, in mid-2011 when the tax and reserve effects will come into force, fuel price will climb for about five santims. Moreover, it could already fluctuate around 95 santims. However, if the chaos keeps escalating and disruptions in oil production take place, any future prospects will be unpredictable. Considering the tax and reserve impact, fuel prices might soar, even exceeding one lat, Gaspuitis says.

Fuel price forecasts coincide with the assessment of political processes in North Africa and Middle East, as well as its potential shift to other authoritarian states.

The rapid oil price gains prompt talks on how much more the global economy can withstand.

It is possible that due to their continuous rise, the consumption and growth is undermined, resulting in price drop to lower levels, the expert indicates.

However, he acknowledges that in any case fuel will become more expensive, yet the extent of the surge will be determined by many unpredictable factors.

The only way to reduce this impact is to improve the efficiency of oil resource consumption. Most likely, more active government involvement is necessary to promote this issue and find solutions, believes the analyst.

In the longer term, gas consumption and usability will grow, because problems with this resource availability are not expected in near future.

The already spiking fuel prices reflect the tax rise, political instability in North Africa and the Middle East, as well as speculations. Consequently, the price of fuel is coming close to 90 santims.

The political crisis in the region is only starting to escalate, and it is still difficult to determine its possible spread to other regions or countries; besides, particular concerns arise from the likelihood of unrests in major oil-exporting countries, such as Saudi Arabia, United Arab Emirates and Iran, the expert emphasizes.

So far, Saudi Arabia could compensate the oil shortage due to the riots in Libya, but the available capacity is limited and no one can guarantee that the unrest does not excel there as well.

If these revolutions can ensure a reasonable power changeover process, which does not cause significant oil production disruptions, it is possible to expect that oil prices will stabilize.

Western countries will put a lot of effort for that to happen, because it undermines their economic growth; however, it is rather unpredictable, therefore any substantial price reductions cannot be expected in the short term, the expert underlines.

Internal battles over oil extraction revenues are yet to come and there is little hope that this country will manage to revive the principles of democracy. Therefore, fuel prices in Latvia will continue to soar, concludes Gaspuitis.

As reported, the price of 95-octane fuel at Latvija Statoil refuelling stations rose by 1.5 santims – from 87.9 santims to 89.4 santims per litre over the week.

While the price of diesel at Latvija Statoil stations increased by one santim – from 88.9 santims  to 89.9 santims a litre.

Leave a reply

  1. Ricky says:

    Grade A stuff. I’m unqusteionably in your debt.

Week in Lithuania. President proposes amendments to restrict bailiffs' remuneration

Lithuanian President Dalia Grybauskaitė is putting forward amendments aimed at restricting bailiffs' financial remuneration to up to 15 per cent of the amount recovered.

BNN summary of the week: pre-election heat, rule of law in Latvia, Baltics prepare for Pope’s visit

BNN offers a summary of this week’s topical news in a variety of categories: Elections; Change; Stagnation; Fight; Visit; Investigation.

Court reschedules viewing of criminal case due to Non-citizens Congress leader’s poor health

Riga City Vidzeme Suburb Court announced today that the viewing of the criminal case in which leader of Non-citizens Congress Aleksandrs Gapoņenko is accused of inciting national hate will be postponed to a later date.

Producer prices in industry up 1.0% in Latvia in August

Compared to July, level of producer prices in the Latvian industry rose by 1.0 % in August 2018. Level of prices of products sold on the domestic market grew by 1.9 %, but of exported products – went up by 0.1 %.

Bishop: priest suspected of sexual abuse to be operated on in hospital

Pāvels Zeiļa, who is a priest of Rezekne Aglona diocese and the suspect in the criminal case regarding sexual violence and human trafficking, will undergo a complicated surgery on Friday, 21 September, as reported by Bishop Jānis Bulis.

Study: residents withdraw money from ATMs less often but in larger amounts

Every now and then discussions about dropping cash money altogether become active in society, AS PrivatBank representatives say.

HND Grupa design company, involved in Zolitude tragery, declared insolvent

Building engineer Ivars Sergets company HND Grupa, which was involved in the case revolving around the Maxima supermarket that collapsed in Zolitude, killing 54, not five years ago, has been declared insolvent, as reported by Latvijas Avīze.

Deputy Chief of State Fire and Rescue Service suspected of misappropriation

Latvia’s Interior Affairs Ministry’s Internal Security Bureau has detained deputy chief of State Fire and Rescue Service Ints Sēlis and one other official – a senior inspector, as reported by Panorāma programme of LTV.

Washington sanctions China for buying Russian military equipment

U.S. government has introduces sanctions against the Chinese army over a purchase of fighter jets and missile systems from Russia, despite a U.S. sanctions law targeting Moscow for attempts to sway in the 2016 U.S. election.

Autumn expected to begin soon in Latvia

Friday, 21 September, is expected to be warm in Latvia. Sun and considerable amount of clouds are expected, but not precipitation. Wind will draw in from the south, reaching a speed of 15-17 m/sec in western and central regions, as reported by Latvia’s Environment, Geology and Meteorology Centre.

Brexit: a finish line with no end in sight

Less than 200 days are left before Britain officially leaves the European Union. The state of the agreement between Britain and EU only serves to create more chaos, from which neither Britain nor EU, or even Latvia will benefit.

EU underlines to London: No-deal Brexit also option

European Union's top officials and member state leaders planned to push for a Brexit deal in October, while urging London to give ground on the issues trade and the Irish border by November, to avoid a no-deal Brexit.

Lithuanian PM, a presumable presidential hopeful, set to curb grocery price growth

Having chastised food retailers on many occasions for high grocery prices, Saulius Skvernelis, the Lithuanian Prime Minister, stepped forward in the bid to harness local supermarkets. The presumed presidential candidate of the ruling Farmers and Greens (LVŽS) has summoned this week executives of major retail food chains, scolded them and reaffirmed his pledge to rein in the edging up prices.

Industrial prices in Estonia – up by 3.4% on year

The industrial price index in Estonia has risen from August 2017 to August this year by 3.4%, official statistics show.

Latvian parliament approves transition to competence-based approach in education content

On Thursday, 20 September, Latvia’s Saeima approved in the final reading amendments to the Education Law, necessary for the gradual introduction of competence-based approach in education materials.

Latvian Saeima wants to disallow shareholders to work in company management board

On Thursday, 20 September, Saeima approved in the first reading amendments to the Credit Institutions Law that provide for multiple measures to enhance Latvia’s finance system and its long-term stability, as reported by the parliament’s press-service.

Aglone Council prohibits residents from organizing protests during Pope Francis’ visit

A protest against the Catholic Church’s ban on abortions and expression of shock in relation to the recent sex scandals involving Catholic priests was planned to take place in Aglone during Pope Francis’ visit, but the city council decided to disallow them.

Latvian parliament conceptual supports pension bonus indexation

On Thursday, 20 September, Saeima supported in the first reading several initiatives for a more rapid pension climb for several groups of pensioners, as reported by Saeima press-service.

Majority Saeima deputies support open president vote; UGF members fail to decide unanimously

On Thursday, 20 September, amendments to the Constitution regarding open election of the state president were approved in the second reading.

Four Estonian parties have strong support, enough to enter Riigikogu

Four Estonian parties are believed to currently have enough support to enter the Estonian parliament, a broad opinion poll showed, as leading parties compete for voter backing.

Vitol Group concerned over state of rule of law in Latvia; turns to state officials

One of the largest energy resource traders in the world – Vitol Group – has sent a letter to Latvia’s highest ranking officials, expressing deep concern over the rule of law and application of legislative acts in the litigation between LatRosTrans and Polocktransneft Druzba over the EUR 66 million worth technological oil.

As Pope heads to Baltics, more attention to Catholic sex abuse

The time, when Roman Catholic Pope Francis is set to visit the Baltics, greatly differs from the visit by Saint John Paul II in 1993. There is public resentment over the countries spending several million euros to host the trip of the pontiff and the Catholic sex abuse scandals are topic of discussion.

Officials asked to take responsibility for misuse of state resources

If misuse of state resources takes place, officials have to take responsibility and pay for the damages caused to the state, says Public Expenditure and Audit Committee chairman Andris Bērziņš.

May asks EU not to divide Britain, while Brussels waits for UK change of position

At a European Union summit in Austria, UK's Prime Minister Theresa May called on EU leaders leave behind "unacceptable" Brexit demands that according to her may rip Britain apart.

Saeima decides to divide EUR 8.3 million of healthcare budget funds to finance reforms

Saeima’s Budget and Finance Committee has supported the initiative to divide EUR 8.277 million from the planned chronic patient care funding to further finance reforms in the country’s healthcare system.

Newest comments