Fuel prices in Latvia could decline if current global market trends continue - retailers

RIGA - The retail price of diesel and gasoline in Latvia could decrease if the current trends on the world market continue, fuel traders told LETA.

Gatis Titovs, head of the fuel category at Circle K Latvia, told LETA that recent events in international politics, especially in relation to the tariffs imposed by the US, have affected the price of both oil and oil products on the stock exchange, as well as the current supply and demand ratio in the global market has an additional impact on prices.

"If this trend continues in the long term and other influencing factors remain unchanged, it is likely that Latvia will also see a decline in retail prices for diesel and gasoline," Titovs said.

However, he stressed that a fall in prices is not always directly and immediately reflected in the retail price of fuel, as it is necessary to take into account that the retail price of fuel is shaped not only by the purchase price but also by the US dollar/euro exchange rate, the geopolitical situation, taxes and various retailer costs, including logistics and other supply chain factors. Price dynamics are also influenced by the domestic market situation, demand and the level of existing fuel stocks.

"Fuel prices can change with a certain time lag, from a few days to several weeks, due to oil market fluctuations," Titovs added.

Janis Viba, chairman of the board of energy trader JSC Virsi-A, which operates under the Virsi brand, told LETA that Brent index oil prices have fallen from USD 74 per barrel at the end of March to USD 63 per barrel at present.

He explained that the sharp drop in prices was due to two reasons. Firstly, the US administration's decision to significantly increase tariffs for most countries in the world raises the likelihood of a global recession in the near future, with a corresponding potential reduction in future oil demand.

The second reason, he said, is that the OPEC+ producing countries have agreed to increase oil production from May 2025, which will increase the supply of oil on the market.

"Accordingly, for these two reasons, we are seeing a fall in oil demand along with an increase in oil supply, which in turn is resulting in a significant reduction in the oil price," Viba said.

He added that fuel prices at the pump usually follow the oil price trend with a slight time lag due to the length of the supply chains and the size of the stock of petroleum products built up by a particular trader.

As reported, stock and oil prices have fallen significantly on global stock exchanges amid concerns about the negative impact of tariffs imposed by US President Donald Trump.