Low oil prices not seen at the pump

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Two Norwegian government ministers have summoned gasoline station operators in for a meeting, to question them as to why lower oil prices aren’t reflected at the pump when motorists need to fill their tanks. They were told how the pump prices mostly reflect taxes, which wasn’t the answer Finance Minister Siv Jensen wanted to hear.

Jan Petter Fedje of the competition authority "Konkurransetilsynet" has been leading a study  of fuel pricing in Norway and intends to keep following the market, as does Finance Minister Siv Jensen. PHOTO: Konkurransetilsynet/Marit Hommedal

Jan Petter Fedje of the competition authority “Konkurransetilsynet” has been leading a study of fuel pricing in Norway and intends to keep following the market, as does Finance Minister Siv Jensen. PHOTO: Konkurransetilsynet/Marit Hommedal

Pål Heldaas, communications director for Statoil Fuel & Retail, Norway’s largest petrol station chain, told state broadcaster NRK that he thought it was odd that he and his firm’s competitors were called in on the carpet, because Jensen herself is in the best position to lower pump prices in Norway.

Fully 60 percent of the now-roughly NOK 14 that motorists in Norway pay for fuel is the sum of various fees and taxes, confirmed Inger Lise Nøstvik of the Norwegian Petroleum Institute, while 30 percent is the actual cost of the fuel. The remainder must be shared by wholsesalers, distributors and retailers, with Heldaas claiming that the gas stations only get “a few øre” in margins.

Jensen’s government did lower fuel taxes slightly last year, and that was initially reflected at the pump shortly after New Year. “But we’ve since seen prices rise in recent months,” Jensen complained, even though the price of oil is lower than it’s been for years.

She and Trade Minister Monica Mæland were then told how oil and refined petroleum products are priced and traded in two entirely different markets. While crude oil prices have fallen dramatically, petrol/fuel/gasoline and diesel prices haven’t fallen nearly as much, Heldaas told state broadcaster NRK. “Our prices are market prices for refined products, which we must pass on to our customers,” he said.

Jensen remained uneasy because of the state competition authority’s recent findings that fuel prices don’t vary much among retail stations, and often rise and fall at the same time. The meeting was her second with the station operators in less than a year, and she indicated she intended to maintain pressure on the fuel business pending results of ongoing research by the competition authority (Konkurransetilsynet).

newsinenglish.no/Nina Berglund