Although the fuel market in Latvia operates under free market conditions and prices are set by the traders themselves, the sector is closely supervised to ensure that consumer rights are respected and that prohibited agreements and other infringements between market players are not permitted.
The Competition Council (KP) monitors the situation in the fuel market in the context of the current geopolitical situation and, within its remit, assesses whether the conduct of market participants complies with competition law; the Consumer Rights Protection Centre (PTAC) oversees compliance with consumer rights, while the State Revenue Service controls tax payment and the circulation of fuel. The Ministry of Economics (EM), in turn, analyses market trends and, where necessary, is entitled to propose changes to policy in this area.
“Although the fuel market in Latvia is concentrated – most of it is made up of a few large players and competition most often takes place at local level – it is competitive overall. However, the Ministry of Economics will continue to follow its development and ensure effective supervision,” emphasises Minister for Economics Viktors Valainis.
The public often asks why fuel prices at several stations rise almost simultaneously. When assessing changes in the market, the supervisory authorities explain which factors have driven the price fluctuations and whether this has happened for objective reasons. Price fluctuations may be linked to the same external factors – oil prices on international markets, wholesale costs, logistics and exchange rate movements – which is normal under free market conditions, yet may look like companies acting on a mutual agreement.
Taxes have a substantial effect on the price of fuel – they make up roughly half of the total amount paid by the end consumer. Moreover, fuel is sold at stations from stocks purchased earlier, so price reductions are often reflected with a time lag.
To ensure the continuity of fuel supplies in crisis situations, Latvia maintains state security reserves of petroleum products. From 2024 to 2028 the state is gradually acquiring the reserves into its own ownership, while during the transition period part of them is provided through maintenance services, or “option contracts”. In a crisis, these reserves can help to stabilise the market, but they are not an instrument for artificially lowering prices.
The Ministry of Economics encourages consumers to make active use of the opportunities the market offers – to compare prices, use loyalty programmes and take advantage of the available price comparison tools. Should they have questions or suspicions, members of the public are invited to contact the relevant authorities – EM, KP or PTAC.