Johan Sverdrup oil field in the North Sea. Europe’s search for alternatives to Russian oil and gas has dramatically increased the demand — and price — for Norway's oil and gas. (AP)
While U.S. drivers despair over gasoline topping $5 a gallon, spare a thought for motorists in oil-rich Norway, where prices sit at $10.
Gas stations in Oslo were selling the unleaded fuel for about 27 kroner a liter, or about $10.30 a gallon, on Friday. That makes it the most expensive European country to fill up and second only to Hong Kong globally. Almost half of the pump cost in the Nordic nation is made up of road, carbon and sales taxes, according to the Norwegian Automobile Federation.
Norway is Europe’s top petroleum producer, and the surge in oil and gas prices due to the war in Ukraine has boosted its coffers. But its consumers — like those across the continent — have been hit by rising pump prices at a time when they’re being squeezed by higher energy and near-record food costs.
While Norway’s government has stepped in to subsidize household energy costs, it’s not so keen to do so when it comes to gasoline. With inflation exceeding 5%, speculation is mounting that the central bank will be forced to double the size of its planned interest-rate hike next week. That may not leave the state with a lot of room to help with gasoline prices.
Still, higher fuel prices could help drive the shift toward zero-emissions vehicles in Norway, where four out of five new cars sold so far this year were electric. Much of that has been thanks to a slew of incentives, including reduced taxes on new purchases that’s part of a goal to eradicate sales of new petroleum-fueled cars by 2025.