Oil Retail's operating environment
The most important external factors affecting the financial result of Neste Oil’s Oil Retail reporting segment are general economic developments and overall liquid fuel consumption.
Read more about Neste Oil's Oil Retail reporting segment.
Continuing tough competition around the Baltic
Competition in oil retailing around the Baltic remained tough throughout 2011. Turbulence in the global economy impacted the region’s markets and retail prices were hit by high crude prices and political decisions, which saw consumption decline. Diesel fuel increased its share of the market, as heavy traffic usage did not fall back as much as other areas. Uncertainty in the fall also began to make itself felt in industry and the transport sector.
E10 gasoline received a critical reception in Finland
The mandated bio-content of traffic fuels in Finland rose from 4% to 6% of energy content at the beginning of 2011. As a result, 95E10 containing a maximum of 10% ethanol became the country’s standard-octane gasoline.
Drivers initially reacted critically to the new fuel, both in terms of its suitability for their cars and its energy content, and debate on the issue received extensive coverage in the media. Consumer uncertainty was also reflected in sales figures, which saw demand for 98-octane E5 gasoline, intended as a fallback grade, exceed technical demand during the first quarter. The situation normalized by the end of the year, however, when 95E10 gasoline accounted for 51% of gasoline sold in Finland.
Changes in excise duty brought higher fuel prices in Finland
Changes to the excise duty levied on fuel in Finland introduced at the beginning of 2012 increased gasoline and diesel prices. The changes emphasize the CO2 component of fuels. The CO2 tax levied on motor gasoline increased by 2.34 cents a liter and that levied on diesel fuel by 2.65 cents a liter. The increase applied to diesel came on top of a 7.9 cents increase in tax decided earlier. Factoring in VAT, the changes brought an increase of just under 3 cents a liter on gasoline and 12 cents a liter on diesel fuel. A similar increase has been proposed for introduction later, probably in 2014.