Petrol and diesel prices in Finland have clearly decreased in recent weeks.
According to fuel price tracking site Polttoaine.net, the average price for 95E10 gasoline was 1.737 euros per liter on Saturday, while the per-liter price for diesel was 1.644 euros. That's cheaper than in March, when the average price for both petrol and diesel stood at 1.79 euros per liter, according to Statistics Finland data.
The price decrease was mainly due to a fall in crude oil prices, according to Hanna Kalenoja, senior advisor at the Chambers of Commerce's transportation and logistics unit.
She noted that oil prices had already started to drop at the beginning of the year, and prices started rapidly falling after US President Donald Trump announced a slew of high import tariffs. For example, the price of Brent crude oil briefly fell below 60 US dollars a barrel at the beginning of this month, reaching its lowest level in more than four years.
According to Kalenoja, the drop in oil prices was prompted by expectations of a global economic growth slowdown — and a subsequent reduction in oil consumption.
Last week, the International Energy Agency forecast that demand for oil is expected to be lower than previously anticipated, due to increased global market tensions caused by the growing trade war. OPEC also recently cut its global oil demand growth forecast, citing Q1 impacts as well as the tariffs announced by the US.
Diesel cheaper than petrol
Kalenoja said that the price for renewable fuels often develops in a similar direction as those of fossil fuels. This factor has also contributed to lower prices at the pump, as renewable fuels are blended with petrol and diesel.
At the beginning of this year, 95E10 petrol and diesel were roughly the same price per liter, but now diesel is cheaper than petrol. According to Kalenoja, diesel prices should be lower than petrol prices, because it is subject to less taxation.
"For example, between 2015 and 2020, diesel was about 15 cents per liter cheaper than gasoline," Kalenoja explained.
Fuel markets saw major changes after Russia's full-scale invasion of Ukraine a bit more than three years ago. Among other things, the development saw an increase in diesel refining margins, which resulted in higher pump prices.
"There aren't enough diesel producing plants in Europe so it has to import diesel from abroad. If it can't be imported from Russia, it is imported from the Middle East, North Africa or America, and then there are bigger price pressures," she said.
However, the oil market situation is gradually stabilising, with price differences between petrol and diesel starting to normalise.
Day-to-day fluctuations
The recent diesel price decrease may also have been influenced by the fuel being slightly more expensive in winter than in the summertime. Most oil used for heating purposes is chemically very similar to diesel, so consumption of diesel is slightly higher in the winter, according to Kalenoja.
If global trade war tensions ease, the price of crude oil could well return to 70 to 80 dollars a barrel, Kalenoja said.
"If the global economy takes a bigger hit from tightening trade policy, it may well be that the price of oil will remain at these lower levels, which will also lead to a decrease in pump prices in coming months," she said.
However, pump prices have not fully caught up with crude oil prices.
"The price change may not be fully visible at the pump yet," Kalenoja explained, adding that there are intraweek price fluctuations which are difficult to explain.
"The weekly fluctuations could well be 15 to 20 cents at filling stations, depending on their prices and local competition," she said.
"If you can plan your refueling times for the cheapest day of the week and always find the cheapest gas station in the area, then it might make a difference. Especially if you drive many kilometers, it can add up to quite significant savings over the course of a year," Kalenoja said.