Swedish fuel tax cut to spark Norwegian rush

Sweden is set to implement a temporary reduction in its tax on gasoline and diesel, effective July 1, a move that positions the country among the cheapest fuel destinations in Europe. This price adjustment is anticipated to trigger a substantial increase in demand, with industry professionals expecting a rush at the pumps, particularly from neighboring Norwegian consumers. The temporary tax cut aims to make fuel more affordable, but it raises concerns about potential short-term supply issues.

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It can be short-lived emptiness at the pump for a few hours.

According to industry organization Drivkraft Sverige, the temporary reduction could lead to "short-lived emptiness at the pump for a few hours." David Sällh, who oversees preparedness at the organization, noted that while there is ample fuel available, the logistics of delivery might cause temporary delays. "It's more the deliveries that can take time," he added.

With the tax cut, Sweden's gasoline prices are projected to become the second cheapest in Europe, surpassed only by North Macedonia. Diesel prices will also become highly competitive, ranking Sweden as the fifth cheapest in Europe, following countries like Bosnia, Kosovo, North Macedonia, and Poland. This significant price difference is expected to draw considerable attention from drivers in neighboring countries, especially Norway, where fuel prices have recently been higher.

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You have our neighbors in the Nordic countries, who will of course come over. It has an impact.

Anders Svensson, business area manager at car dealership Brandt, which operates the Tankas gas station chain in western Sweden, is preparing for increased customer flow. "I'm going to Strömstad tomorrow to talk to our staff there," he said. He highlighted that Norwegian drivers are a significant customer group in the border regions, and previous price discrepancies have already led to long queues. "In Strömstad and Ed, we see volumes increasing, but also in Hunnebostrand on the west coast compared to previous years. It's a bit surprising. But in Strömstad, the answer is that it's the Norwegians," he noted.

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I'm going to Strömstad tomorrow to talk to our staff there.

Energy economist Claes Hemberg expressed criticism, pointing out that the electricity tax is not being reduced concurrently. He forecasts that gasoline prices could fall to their lowest level since 1999, reaching around 13 Swedish kronor per liter. This is attributed to a series of tax cuts over five years that have lowered the gasoline tax from 8.58 kronor to 1.96 kronor per liter.

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In Strömstad and Ed, we see volumes increasing, but also in Hunnebostrand on the west coast compared to previous years. It's a bit surprising. But in Strömstad, the answer is that it's the Norwegians.