In recent months, there has been great dissatisfaction with the pumps. Record-breaking fuel is not known for creating a good atmosphere.
But according to the fuel industry’s largest player, Circle K, there is not much that can ease motorists’ moods right away.
Pål Heldaas, communications director at Circle K, says that it is the reluctance to buy from Russia that is the reason for the increased prices.
– As long as you do not increase production capacity quickly or there will be peace in Ukraine, this condition will persist, says communications director Pål Heldaas to TV 2.
He only sees to possible solutions.
– LARGE MARKET SHARE: Despite Circle K’s market share of about 30 percent in Norway, communications director Pål Heldaas believes they can not reduce prices. Photo: Terje Pedersen
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If the price is to be reduced in the short term, the authorities must reduce the fees, and in the longer term the situation in the world market must normalize.
But it is not just the purchase price and fees that determine the price. Part of the price is also the share the company is left with.
Half a billion in profit
Circle K had an operating profit of NOK 661 million in 2021, and made a profit of NOK 470 million. The largest fuel companies have mostly since 2016 managed to get over 100 million in profit, shows figures TV 2 has collected.
Despite large profits, Circle K rejects that they have any opportunity to cut prices themselves.
– We are commercial companies. The fuel companies have a mandate to make money. But we make little money on every liter of fuel, says Heldaas.
– Can you live with smaller margins for a period for prices to go down?
– We compete with the other chains all the time, so the margins are where they should be. There is not much to go on.
– Incorrect calculation
According to the company, the distribution of what you pay in liter price is 60 percent in taxes, 30 percent in purchase price and 10 percent goes to the company.
– – ERROR: Vedum believes this division, where the fees account for 60 percent of the liter price, is incorrect.
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– The calculation is wrong, says Minister of Finance Trygve Slagsvold Vedum (Sp) to TV 2.
He believes the fuel companies are trying to blame the state for the high prices.
– Their propaganda says that 60 percent of the fuel price is tax, and that is wrong, says Vedum.
The Minister of Finance believes that simple calculations show that the industry’s division of the liter price is a myth.
– For a truck owner who gets the VAT back, the fuel price would then be just under nine kroner, if it were correct, Vedum estimates.
Heldaas in Circle K believes the finance minister needs to put the blame for the high fuel prices on someone else.
– He collects 18.3 billion in excise duties, then VAT is added and has increased tax revenues as a result of the price level we have now. I do not think he misunderstands, but he uses the numbers in his favor, says Helgaas
Warns against exploiting the war
Vedum warns the fuel industry against exploiting the Ukraine crisis to artificially drive up prices.
– It is easier for the individual to take out a little extra margin when there is so much unrest around price, but the sum of it is so negative. Especially for those who are dependent on transport or people who can afford it, says Vedum.
Therefore, he believes no one must take advantage of the opportunity the war provides to take out extra margin.
– You have to be open about what the real costs are. We must try to ensure that we have a tax level that does not cause us to raise prices, and then the industry must ensure that they have a competition and do not take out extra winnings, says Vedum.
Heldaas reports that Circle K is taking advantage of the war situation.
– We do not use the war to increase our margins. We make an attempt to run an equally profitable company in periods where prices fluctuate greatly, which is demanding for us, says Helgaas.
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