Comparison of fuel price in Iceland and crude oil world market price

Petrol and Diesel are liquid fuel products refined from the naturally occurring liquid material known as Crude Oil, so prices of said fuel products are dictated by the price of Crude Oil.

Icelandic news organizations cover from time to time the development of fuel price in Iceland and refer loosely to development of oil world market price or rate of the icelandic currency ISK, but what story does related data itself tell us?

Let's take a look.

Crude Oil world market price development (USD/Barrel)

Crude Oil world market price development in Europe (USD per barrel) from the U.S. Energy Information Administration. Unfortunately, this data sometimes tends to lag behind a couple of days and then suddenly catch up again, when this happens we substitute the missing days with data on Crude Oil price development in North America from Business Insider / Markets Insider until things catch up again.

Currency rate of USD to ISK

Data from the Central Bank of Iceland (isl. Seðlabanki Íslands) showing development of USD to ISK rate.

Crude Oil world market price development (ISK/Liter)

Development of Crude Oil world market price in Europe converted from barrels (bbl) to litres and converted from USD to ISK. Calculated by using Crude Oil Barrel world market price development and Currency rate of USD to ISK. The Barrel volume unit (1 bbl) is equivalent to a volume of 158.987294928 litres according to Wikipedia.

Petrol price development in Iceland (ISK/Liter)

Development of Petrol price (ISK/Liter) in Iceland. The data consists of monthly mean petrol price logged by FÍB (e. Association of icelandic car owners) since 1996-09, and data from the Gasvaktin automated price lookup project which has been running since 2016-04-19.

Diesel price development in Iceland (ISK/Liter)

Development of Diesel price (ISK/Liter) in Iceland. The data consists of monthly mean diesel price logged by FÍB (e. Association of icelandic car owners) since 2005-07, and data from the Gasvaktin automated price lookup project which has been running since 2016-04-19.

Crude Ratio

This graph displays the ratio between the world market price of 1 liter Crude Oil in ISK against the price of 1 liter Petrol in Iceland. It gives a certain perspective to the interplay of Crude Oil world market price, exchange rate of the icelandic currency ISK and fuel pricing in Iceland, spikes in it are indicators of sudden changes in crude oil prices, ISK currency rate or icelandic fuel price.

Comparison

Let's do a simple data review process on the above data. First we look at Crude Oil prices in ISK/Liter today, then we figure out when, before three months ago, Crude Oil prices in ISK/Liter were last in the price range they're in today, afterwards we compare fuel prices then and now. The minimum requirement of three months we make just to prevent us from examining tiny time periods when prices are stable but constantly fluctuating over and under current price stability range. For simplicity reasons and also partially lack of data reasons we make the following assumptions. Fuel prices follow Crude Oil prices within couple of days and no tax changes are made in the comparison time period. Note that these assumptions are naive ones, the first one close to never holds and the second is incorrect from time to time, tax changes usually take effect on new year.

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Then Now Diff Percent
Crude Oil USD/Bbl --- USD --- USD --- USD --- %
CentralBankRate 1 USD --- ISK --- ISK --- ISK --- %
Crude Oil ISK/Liter --- ISK --- ISK --- ISK --- %
Petrol Price ISK/Liter --- ISK --- ISK --- ISK --- %
Diesel Price ISK/Liter --- ISK --- ISK --- ISK --- %

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Conclusion

Above graphs tell us that more than just Crude Oil world market price and exchange rate of ISK control fuel price in Iceland. Obvious candidates are icelandic fuel taxes, import costs and other expenditures, and possibly pricing of the only fuel importer in Iceland, the norwegian oil company Equinor (formerly Statoil) which sells fuel to all the icelandic oil distribution companies.

If you're interested in further rewiew on the above you might want to take a look at Bensínvakt Kjarnans (e. Petrol watch by the icelandic online news organization Kjarninn), it displays a detailed breakdown analysis of the fuel price in Iceland, and the data is updated monthly.

Also, if you dear reader are interested in taking a deeper look yourself at the data displayed in above graphs you can take a look at both the raw data and see how it is automatically collected and updated in the repository "gasvaktin-comparison" on Github.