Electricity prices to remain fixed for 2022

Public energy supplier SEV has hedged its oil price exposure for 2022.

This allows the company to maintain steady electricity prices for the remainder of this year despite fuel prices going up by more than half since Russia’s invasion.

“We have been using a price hedging programme for oil over the past few years to guard against price volatility,” says SEV CEO Hákun Djurhuus.

“Looking at the current and the projected 2022 market prices of oil, we expect to save about DKK 100 million in 2022 since for the remainder of this year we can continue to buy oil at a fixed price that was set before the war broke out.”

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He adds that the current situation is a perfect example of why it makes good sense to switch to renewable energy sources.

However, the steady prices only apply to SEV.

Privately-owned oil companies Magn and Effo have not hedged their oil price exposure. The two companies have slightly different pricing models, but they say they generally have no choice but to sell fuel at market prices due to the current volatility in the market.

Many commuters say they are starting to consider carpooling or public transport as the fuel prices have become “unbearable”.

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Eight of the country’s leading trade unions yesterday urged the government to reduce or suspend taxes on fuel to bring down the prices at the pumps.

The government currently charges an excise duty of DKK 2.40 per litre of petrol sold, DKK 1.30 per litre of diesel and DKK 0.80 per litre of oil for household consumption.

Finance minister Uni Rasmussen says it is too early to make this decision, but he says he will look into the matter.

Read the Faroese versions of this article here, here and here.

Translated by prosa.fo.

More Faroese News in English.