Diesel prices threaten Finland’s small transport companies

Diesel prices have risen beyond the pain threshold for Finnish transport companies, with smaller businesses facing the greatest pressure, Yle reports. A transport entrepreneur in Korpilahti says his fuel bill has reached as much as 900 euros a day.

Matti Perälä says his fuel costs have increased month by month. His company may use 400 to 500 litres of diesel a day.

“The pain threshold has clearly been exceeded,” Perälä says.

The Finnish Transport and Logistics Association SKAL says the situation across the sector is already extremely difficult. Demand for transport has increased and companies’ revenues are growing, but rising costs are weakening profitability.

Finland has Europe’s highest diesel prices

Conflicts in the Middle East and serious disruptions to fuel transport have pushed diesel prices higher. According to EU price monitoring, diesel is now more expensive in Finland than anywhere else in Europe. It costs 57 cents more per litre in Finland than in Sweden.

SKAL is calling for rapid measures, including lower fuel taxes, a reduction in the fuel distribution obligation and fuel support. The association is also urging the introduction of commercial diesel.

Commercial diesel would be a system in which part of the diesel price is refunded to transport companies. The proposed refund would be 3.2 cents per litre, which SKAL considers insufficient.

Small companies have the least room to absorb costs

Tomi Solakivi, an associate professor at the University of Turku who specialises in the transport sector, says diesel price increases have the greatest effect on the profitability of small transport companies.

He says the sector was already operating with weak profitability and that small companies have little room to manoeuvre. They also have less bargaining power and are generally less able than large companies to pass higher costs on to customers.

Higher diesel prices will therefore increase costs for customers ordering transport as well as reduce the profitability of transport companies, Solakivi says.

Solakivi says the commercial diesel scheme, which has been under preparation for a long time, will not help companies in the current situation because it is not due to begin until the start of 2028. The coming year is likely to remain uncertain.

Perälä also says that reducing the fuel distribution obligation would provide the quickest relief. The obligation concerns the distribution of bio-based fuel.