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Petrol prices increase over summer months

Drivers have been paying nearly two euros per litre in some parts of Finland.

tankkausta bensa-asemalla
Increased demand, higher taxes and fluctuating exchange rates have all contributed to the price increase. Image: Markku Pitkänen / Yle

The price of petrol in Finland has risen sharply during the summer months, with the average price of 95 octane petrol fluctuating between 1.60 and 1.70 euros per litre and vehicle owners paying even more in some parts of the country.

On Tuesday, some of the most expensive petrol prices, around 1.80 euros per litre and above, were found in southern and central Finland while the cheapest was slightly below 1.60 euros, according to oil price-comparing website polttoaine.net.

Demand for petrol has increased exponentially over the summer, thus raising the per litre price. Local competition as well as the fluctuating exchange rate of the euro against the dollar are also factors in the increasing cost.

"Prices are affected by all of these various factors, and you cannot place more weight on one factor over the other," Neste Vice President Katri Taskinen told Yle by email.

The euro's worth against the dollar fell from 1.23 dollars to 1.18 dollars at the end of May and this weakened euro means consumers are able to buy less crude oil and fuel, as they are typically traded in dollars.

The price increase further stems from tax rises, Taskinen added. Taxes account for roughly 60 percent of fuel prices, so tax increases have a strong effect on prices. Taxes have also partly increased due to the EU's Renewable Energy Directive, which came into force earlier this month.

Oil demand recovered from last year's pandemic blow

The price of crude oil has also risen exponentially since the pandemic led to a decrease in demand and a subsequent impact on the price at the pump.

At the end of April last year, the price of Brent, the European market's reference oil, fell to just over 15 dollars per barrel.

By the beginning of 2021, the price was 56 dollars, and this month the price per barrel reached 77 dollars.

The world’s leading oil-producing countries recently agreed to moderate crude oil production from August. In order for the global economy to recover following the coronavirus pandemic, lower and more stable crude oil prices need to be ensured.

The decision to regulate prices was made by a collective of petroleum exporting countries, known as Opec+, which includes countries such as Saudi Arabia and Russia.

"By increasing production, Opec + aims to prevent the price of oil from rising higher than the current level, so that competing crude oil producers, such as shale oil in the United States, do not want to increase production," Neste CEO, Sami Oja, said.

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