Petrol prices rise in Estonia

  • 1998-12-10
  • Kairi Kurm
TALLINN - Taxes constitute more than half of gasoline prices, but Estonia decided to add another excise tax of 0.5 kroons per liter Dec. 1.

Drivers felt the change the same day they drove into gas stations to fill their empty tanks. They paid 6.50 kroons ($0.48) per liter for 95E gas, while a day before they would have paid only 6 kroons.

In 1997, the government decided to increase the additional excise tax on gas step by step until the year 2001.

"By the end of the planned increase in excise tax, its level will be comparable to those of Western countries," said Ain Ulmre from the Ministry of Finance.

Most gas stations said drivers filled their tanks before Dec. 1, and there were fewer clients the week after the price increase.

"The sales of fuel decreased for a short time due to the impact of increasing prices. People bought more fuel before that. But they will get used to higher prices in a short time," said Indrek Randver, retail sale manager at Alexela Oil.

He also noted gas stations sometimes have to lower their prices despite high excise taxes.

"As of tomorrow, the price of 95E gas per liter will be 10 cents cheaper due to decreasing prices on world markets. We react to these changes quite fast, although sometimes not on the same day," said Randver.

The average price on the world market is still higher than the price in Estonia. According to the business magazine "Tulu," only the average gas prices of Romania, Russia and Lithuania were below the Estonian ones.

In February, the price of 95E per liter cost 6.50 kroons in Estonia, while the price was almost 16 kroons in the Netherlands, Sweden, Finland and the UK. In Norway, prices even exceeded the16 kroon level. In Lithuania, it costs 10 cents less and in Latvia 1.50 kroons more than in Estonia.

According to the daily business newspaper, Aripaev, the price of 95 E fuel is comprised of 1 kroon VAT, 3 kroons excise tax, 0.82 kroons retailer's revenue and 0.48 kroons wholesaler's revenue, while 1.20 kroons is the actual price per liter.