Image: Jóhann Páll Ástvaldsson | Iceland Review

Petrol Prices Dropping

 In Business, News

The reference price of petrol in Iceland has fallen for three months in a row, Kjarninn reports. The current reference price for petrol is ISK 215.5 ($1.80/€1.58) per litre, which is the lowest it’s been since it hit a three-year high in October 2018. At that time, the reference price for petrol was ISK 224.3 ($1.87/€1.64) per litre. The last time petrol prices had been that high in Iceland was June 2015.

Although the price of petrol has been falling, the mid-January figure is still 8.4% higher than it was in the middle of January 2017, when petrol cost an average of ISK 198.8 ($1.66/€1.46) per litre. For reference, the króna to US dollar exchange rate dropped by 10.2% in 2018, and the cost of crude oil on the global market has dropped by just under 12% since the middle of January 2018. The exchange rate is an important factor on the sale price of petrol in Iceland, as the purchase price of imported petrol is calculated in US dollars.

The Icelandic state takes a portion of the profits from each litre of petrol sold. Thus, in 2018, 20.46% of the cost of petrol went toward a special petrol tax, 12.69% went to general petrol tax, and 3.83% went to a carbon tax. Lastly, 19.35% of the sale price is VAT.

All combined, 121.39 krónur from every litre of gas sold went to the Icelandic government in 2018, or 56.33%. The highest that the government’s take has reached is 60.26% in July 2017.

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Minister of Health Svandís Svavarsdóttir