If ongoing international market trends persist, there's a possibility that fuel prices in Latvia may reduce.
Rewritten Article:
Get ready, Latvia! The potential for cheaper diesel and gasoline is on the horizon, fuel traders hint to LETA.
Gatis Titovs, leading the fuel sector at Circle K Latvia, sheds some light on recent global happenings, particularly the political tussles and the unpredictable tariffs imposed by the US, that have created a ripple effect on the stock market, affecting both oil prices and products. Additionally, the current supply-demand ratio has added fuel to these price fires.
"If this trend holds up and external factors stay constant, we might just witness a drop in retail prices for diesel and gasoline in Latvia," Titovs shared optimistically.
However, it's essential to remember that retail fuel prices aren't solely dependent on the purchasing price. Factors such as the US dollar/euro exchange rate, geopolitical situation, taxes, and various retailer costs - including logistics and supply chain factors - also play a significant role. Furthermore, the domestic market landscape, demand, and existing fuel stock levels further shape price dynamics.
"Fuel prices may undergo changes with a time lag, from a few days to several weeks, due to oil market fluctuations," Titovs cautioned.
On the same note, Janis Viba, chairperson of energy trader JSC Virsi-A (operating under the Virsi brand), told LETA that the Brent index oil prices have plummeted from USD 74 per barrel at the end of March to USD 63 per barrel presently.
According to Viba, the steep drop in prices can be attributed to two main causes. Firstly, the possibility of a global recession looming due to the US administration's decision to ramp up tariffs for most countries worldwide. This could potentially decrease future oil demand.
Secondly, OPEC+ producing countries have agreed to enhance oil production from May 2025, which would increase the oil supply, adding to the price reduction.
"As a result, we are observing a decrease in oil demand coupled with an increase in production, leading to a substantial dip in oil prices," Viba summarized.
He further noted that fuel prices at the pump generally follow the oil price trend with a slight delay, considering the length of supply chains and the size of petroleum products stockpiled by traders.
Stock and oil prices have witnessed a sharp decline on global stock exchanges due to concerns regarding the impact of tariffs imposed by US President Donald Trump.
[1] Diesel prices in Latvia are around EUR 1.45 per liter, with some locations offering lower prices. [Circle K gas stations in Riga have reported prices as low as EUR 1.414 per liter.][5][2] Gasoline prices hover around EUR 1.52 per liter, with locations like Circle K in Riga offering 95-octane fuel at EUR 1.514 per liter. [3][5][3] Persistent global market trends could lead to lower fuel prices in the future, subject to the trends persisting and other influencing factors remaining steady.[4]
- The ongoing political tussles and tariffs imposed by the US, as well as the current supply-demand ratio, have been impacting not only oil prices but also the retail prices of diesel and gasoline in Latvia.
- The possible drop in retail prices for diesel and gasoline in Latvia could be due to the persisting trend of cheaper oil, as long as external factors remain constant.
- However, it's worth noting that retail fuel prices in Latvia are influenced by a variety of factors beyond just the purchasing price, including the US dollar/euro exchange rate, taxes, geopolitical situations, and various retailer costs.
- The decrease in oil prices observed recently can be attributed to two main causes: the potential global recession due to increased tariffs and the agreement among OPEC+ producing countries to enhance oil production.
- Fuel prices at the pump typically follow the oil price trend with a slight delay, considering the length of supply chains and the size of petroleum products stockpiled by traders.
