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MONEY

How long will the decrease in fuel prices in Norway last?

Fuel prices have recently dropped below 20 kroner per litre in several places in Norway. Here's why.

Published: 23 November 2022 14:08 CET
Circle K
In the last week, fuel prices have decreased throughout Norway. Photo by Kristers Kairis / Unsplash

In the last week, fuel prices have decreased across Norway. Motorists who have become used to 25 kroner per litre have had the opportunity to fill up their tanks for 16-17 kroner a litre in several cities, Norwegian Broadcasting (NRK) reports.

There is no widespread consensus on why the prices are going down, and energy analysts and industry experts have pointed to both domestic and international factors as potential drivers of the price drop. 

Why are fuel prices dropping?

According to Circle K, the lower prices are a result of local price wars and low purchase prices.

“We are experiencing strong competition in several places in Norway now. The local price wars push prices down significantly,” Kjetil Foyn at Circle K told NRK.

Low purchase prices (that is, the prices that companies pay for fuel in the market) also contribute to favourable fuel prices for end consumers.

“Our purchase price has fallen a lot for both petrol and diesel in the last week,” Foyn added.

Coronavirus effect?

Nordea energy analyst Thina Saltvedt believes the most important reason for the decline in fuel prices is the resurgence of the coronavirus pandemic in China.

According to her, China accounts for 16 percent of the world’s oil consumption.

“Now, the country is closed to a greater extent, and the consumption of oil is down. Another reason is a slowdown in activity in the global economy due to the rise in interest rates and the threat of inflation,” she explained.

Saltvedt thinks it is too early to say whether the decline in petrol and diesel prices will last due to the volatility in global markets and the uncertain security situation.

“(Russia) is an important player in the oil market and thus has a major influence on access to oil and oil products,” Saltvedt added.

Prices might rise soon

According to the analyst, the European Union (EU) will stop buying Russian oil that is transported by ship from December 1st, which might also affect fuel prices.

“That means that access will be reduced. As a result, prices may rise again…

“If oil prices continue to fall as much as we have seen so far in November, the Organization of the Petroleum Exporting Countries (OPEC) will cut their production so that prices rise again. We saw that after the sharp drop in fuel prices during the coronavirus crisis,” Saltvedt noted.

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OSLO

Potential bankruptcy threatens bus services in Oslo 

The strained finances of bus provider Unibuss could cause chaos for Oslo’s bus network if the company folds. 

Published: 24 April 2024 12:08 CEST
Potential bankruptcy threatens bus services in Oslo 

Unibuss, which is wholly owned by Oslo Municipality, is in danger of going bust due to large losses, unpaid bills, and fines from public transport firm Ruter for issues with its electric bus fleet this winter. 

Oslo City Council will hold an emergency meeting headed up by transport councilor Marit Vea on Wednesday, where she will be grilled on how the council will avert a collapse in the city’s public transport network should Unibuss go bankrupt. 

Unibuss is comprised of four smaller companies that operate bus routes in Oslo on behalf of Ruter. The company has just over 370 buses in operation and covers around 60 to 70 percent of the routes in Oslo and the neighboring municipality of Bærum. 

Oslo’s fleet of electric busses struggled especially with snow and cold temperatures this winter, which caused frequent chaos across the capital’s public transport network. 

Snow, ice, range and charging issues for the busses lead to vehicle shortages which caused mass delays and cancellations several times over the winter. 

Ruter, which is also part owned by Oslo municipality, believes that the financial problems facing Unibuss mean the company could be forced to file for bankruptcy or undergo a major restructuring, according to a memo obtained by publication Teknisk Ukeblad.  

It has previously told public broadcaster that it was working on a plan in case Unibuss goes bankrupt. 

“There is no doubt that the first days of such a scenario will be very demanding for the residents of Oslo and parts of Akershus,” Ruter’s communications director Elisabeth Skarsbø Moen told public broadcaster NRK.  

“First and foremost, we are working to find a solution together with Unibuss that does not affect Ruter’s customers,” she said. 

“But as those responsible for public transport, we have both a plan and an emergency organization ready to also handle a bankruptcy,” Skarsbø Moen added. 

Should Unibuss go bankrupt, its buses would become part of the bankruptcy estate and if such an event were to occur while passengers were in transit, all passengers would need to disembark at the next stop so the buses can be transported to the depot. 

Ruter said it had an eye on the market to try and see what could be available in terms of extra buses and equipment. 

It said that its priority would be to ensure that school transport, and that healthcare workers could get to work, in the event of a sudden lack of buses. 

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