Monday June 21, 2021

Fuel prices on the rise

Published : 10 Jun 2021, 14:46

  DF Report

Petroleum prices in Northern Finland on June 10, 2021. DF Photo.

The rise in energy prices that started at the end of last year continued in the first quarter of this year, according to Statistics Finland.

The rise was affected by higher prices of imported fuels and larger demand for heating fuels and tax increases.

The prices of oil products imported to Finland rose in the first quarter.

Meanwhile, the prices of the petroleum products increased further in the second quarter till June 10.

In spring 2020, the world market price of crude oil fell sharply as the corona pandemic reduced demand and no agreement was reached on the adjustment of production. When the agreement was reached the prices rose rapidly and stabilised for the summer. The prices started to rise again in late autumn 2020. In March 2021, the import price of crude oil was at its highest since February 2019.

The rise in import prices of oil has been reflected in rising consumer prices of liquid fuels. The consumer price of motor gasoline was eight per cent higher and that of diesel oil five per cent higher in March than one year earlier. These were also affected by the tax increases that took effect in August last year. The price of light fuel oil went up by seven per cent in the corresponding period.

The import price of hard coal continued to grow in the first quarter. In March the rise was particularly high and the tax-free price was over double that of the previous year. The excise duty on hard coal was raised at the turn of the year and the price including excise duty correspondingly rose by 27 per cent.

As a result of the deregulation of the Finnish gas market, sufficiently certain data were not available on the development of the price of natural gas in 2020. The first price data of the data collection started by Statistics Finland are published in connection with this release.

Among domestic fuels, the rise in the price of forest chippings continued in the first quarter.

Compared with the first quarter of the year before, the price was five per cent higher. Due to the delay in collecting prices of energy peat, prices for the first quarter were not yet available at the time of writing the release.

The customer prices of district heat were good one per cent higher in January than in the corresponding period last year.

Prices rose clearly on the Nordic electricity market in the first quarter. The rise is explained by the exceptionally low prices in 2020, from which prices came back close to the average for recent years.

The system price of the Nordic electricity exchange derived from the sell and buy bids on the exchange was nearly four times higher in March and the area price for Finland nearly double compared with the price of last year's March.

The rise in electricity market prices was also visible in the one to three per cent rise in consumer prices of electricity in the first quarter depending on the customer group. Correspondingly, prices fell for enterprise customers in the smallest consumption groups but rose clearly for the largest customers.