The market share of small fuel traders in Latvia has been declining in recent years, says Jānis Viba, board chairman of the Virsi-A energy trading company which runs the Virsi brand. He was speaking to the LETA News Agency.
Viba says that the fuel retail market in Latvia is saturated, and the proportion between petrol stations and cars on the road is among the highest in Europe.
“This shows that there is competition with substantial pressure on prices,” Viba explains. “We must understand that the fuel retail sector is very capital-intensive and requires a lot of investment to preserve quality and to grow further.”
The expert added that not all small market participants have been able to invest in capital and maintain quality, so their market share has been declining.
Viba said that four fuel retailers – Virsi-A, Viada, Circle-K and Neste – control at least 80% of the total market. “Those are our main competitors when it comes to market share,” he says.
The board chairman added that the fuel market in Latvia is currently stagnant. During the first nine month s of 2024, retail sales of fuel increased only by 1.3%, which was not much.
Fuel consumption in Latvia has still not reached the level in 2019, before the Covid-19 pandemic erupted. “We are very close, but we are not yet at that level,” Viba says.
During the first nine months of this year, diesel sales increased by 0.9% and petrol sales by 3.8%. Propane gas sales, by comparison, decreased by 6.3%.
“Overall there is a trend that people are migrating away from propane gas to other forms of energy, and least in the world of transport,” Viba says.
He added that it has been a good year for Virsi-A despite overall stagnation in the market. Retail sales of Virsi-A fuel were up by 8% during the first nine months of the year.
“Sales volumes have increased because we’ve opened new petrol stations and have seen positive dynamics at existing ones,” says Viba. “There has been a particularly strong increase in sales this year during weekends and discount periods, when additional discounts and price cuts have increased the volume of sold fuel by as much as 70% in comparison to everyday sales.”
Viba also said that Latvia’s economic environment and macroeconomic indicators mean that people are paying very close attention to prices.
The Virsi-A group posted EUR 343.732 million in audited revenues for 2023, which was down 8.4% from the year before. The group’s profits fell by more than half in comparison to 2022 to EUR 5.099 million.
The Virsi-A group contains the parent company, as well as Virsi Real Estate, Virsi Logistics and Virsi Renergy. The company is owned by several individuals in Latvia, and its shares are listed on the NASDAQ Riga First North Alternative Market.
Source: BNS
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