Global fuel release unlikely to lower diesel prices in Estonia

A release of fuel from global reserves is unlikely to make diesel cheaper at Estonian filling stations, ERR reports. G7 countries plan to put 100 million barrels of diesel and crude oil on the market to ease supply pressures, but Estonia has not been asked to contribute this time.

The International Energy Agency says its member countries, including Estonia, have so far released 325 million barrels of oil and petroleum products from strategic reserves. The countries agreed in March to release 400 million barrels, leaving 75 million barrels still to be supplied.

Terminal board member Alan Vaht said the 100 million barrels announced by the G7 are not in addition to the 400 million agreed by IEA members. It is unclear whether countries will release a further 25 million barrels to bring the total to 100 million.

Estonia released one-tenth of its reserves in March as its proportional contribution. The national reserve centre holds about 83 days of supplies, although the amount varies by fuel type. The usual target is 90 days, and diesel stocks are at that level, said Jaanus Uiga, deputy secretary general at the Ministry of Climate.

Uiga said Estonia had chosen to release less diesel in the spring after finding a small surplus, and released more petrol instead.

Vaht said global fuel stocks have become very low, standing 20 percent below the European five-year average. With more refineries destroyed, processing crude oil has become more expensive. He said the market for finished products remains critical, with the price of immediate delivery now $250 per tonne higher than in April and May.

Diesel prices have eased from their peak two weeks ago but remain at the high levels seen in the first half of September, said Tarmo Kärsna, a board member of fuel retailer Alexela. He said a sharp fall is not expected, as winter and the heating season will increase consumption. Prices are likely to remain at these levels until the conflict in the Strait of Hormuz is resolved.