Latvia, Markets and Companies, Oil, Transport

He said that in retail fuel, as in most business sectors, the Covid-19 pandemic and the measures taken to curb it had an impact on financial performance this year.

"Understandably, the decline in population mobility, the closure of borders with neighboring countries and the general economic downturn have also had a negative impact on the fuel retail sector, as shown by fuel sales in the market as a whole. For example, retail fuel sales in March compared to the previous month in the Latvian market decreased by 5%, in April - by 14% and in May - by 9% percent," said Viba, emphasizing that the consequences of the market decline has led to even fiercer competition between fuel traders, adversely affecting the profitability of companies operating in the industry.

At the same time, he said that during the state of emergency, Virsi-A continued to increase its market share in both the fuel and non-fuel segments, at least partially offsetting the negative impact of the Covid-19 pandemic on the company's performance.

He acknowledged that the fuel industry was also negatively affected this year by the increase in the excise tax rate, with some carriers preferring to purchase fuel in Lithuania. At the same time, Estonia has significantly reduced the excise tax on fuel since May, thus Latvia is also losing customers from Estonia acquired in previous years. Currently, Latvia has the highest excise tax rates for diesel fuel in the Baltic States.

Viba pointed out that this year, as in previous years, market consolidation is likely to continue, with the largest market players continuing to increase market share, building new petrol stations or acquiring part of the networks of smaller market players.