Finland’s gasoline is the most expensive in Europe

Finland tops the EU Commission’s latest fuel price table(siirryt toiseen palveluun). A litre of 95-octane petrol costs 1.94 euros, putting Finland in first place ahead of Denmark and France.

In terms of diesel prices, Sweden has been the most expensive country for some time. Diesel in Sweden costs 1.86 euros per litre, while Finland comes in second at 1.83 euros.

“It’s somewhat surprising. Finland has been in the top three before, but usually not in the lead,” said Hanna Kalenoja, a spokesperson for the Automotive Information Center.

Taxes drive up prices

Hanna Kalenoja pointed out that several factors contribute to the differences in fuel prices between countries, including salary levels and purchasing power. In Finland, taxation is the main reason for high fuel prices. The taxation of gasoline and diesel oil has two components: excise duty, also known as fuel tax, and value-added tax (VAT).

“Right now we have the highest level of gasoline taxation in all of Europe, and it contributes to the high fuel prices. During the energy crisis many countries made changes to fuel taxes to improve consumers’ purchasing power and reduce transportation costs. For example, in Sweden the excise duty on fossil fuels was reduced,” Kalenoja explained.

The addition of a renewable fuel obligation also affects the price of fuels.

To improve purchasing power in Finland, the government last year reduced(siirryt toiseen palveluun) the renewable fuel obligation instead of lowering taxes. The lowered obligation level is still in effect this year.

“The renewable fuel obligation is one factor affecting prices because the tax-free price of renewable fuels is higher than that of fossil fuels. In Finland, the obligation was around 20 percent, but it was reduced for last year and this year, which has lowered the prices of gasoline and diesel,” she explained.

The renewable fuel obligation impacts the price of gasoline, even though it is mainly fulfilled with renewable diesel blends. The obligation affects the overall cost structure of the fuel distribution system, which can indirectly influence gasoline prices.

Finland’s current renewable fuel obligation is 13.5 percent, which is higher than in many other countries. Kalenoja noted that many countries don’t have a national renewable fuel obligation.

The EU, however, requires member states to increase the share(siirryt toiseen palveluun) of renewable fuels to 14 percent by 2030.

“Finland and Sweden have ambitious emission reduction targets for the transport sector defined in the EU regulations, which means it has been necessary to raise the national renewable fuel obligation,” she said.

Source: Yle News