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ENERGY

Danish consumers ‘should get used to’ high petrol costs after EU’s Russian oil decision

Customers in Denmark can expect high petrol and diesel prices to continue for some time, an analyst said on Tuesday following the EU’s decision to further restrict oil imports from Russia.

Sky high petrol prices in Denmark
Sky high petrol prices in Denmark are not expected to fall any time soon. Photo: Bo Amstrup/Ritzau Scanpix

EU member states agreed on Monday night to reduce oil imports from Russia by more than two thirds, in a new measure in response to Moscow’s invasion of Ukraine.

The decision means a continuation of high fuel prices for consumers in Denmark – petrol is currently at a historically high price of over 17 kroner per litre at the pump – according to a Danish analyst.

EU states including Denmark will have to find alternative supplies of oil, which will not be a straightforward undertaking, Jens Nærvig Pedersen, raw materials analyst with Danske Bank, told news wire Ritzau.

“Normal citizens should get used to the increases in petrol prices we have seen this year continuing in coming months or for the rest of the year,” Pedersen said.

“With the decision from the EU countries we should prepare to make do without large amounts of the oil we import from Russia,” he said.

“That means we have to go out and buy oil from other places. But there’s not much oil spare at the moment, so prices will be high,” he said.

Easing of Covid-19 restrictions in China is a further factor in rising prices, as the Asian power begins to reopen factories and industry and its energy demand goes up.

Reduced oil sale from Russia to Europe will mean demand increases in relation to supply.

“Russia is one of the world’s biggest oil producers and exporters so it’s not a simple matter of shutting off imports from Russia and looking elsewhere for alternative,” Pedersen said.

“That’s a lot of oil you have to go out and find,” he said.

EU leaders voted Monday evening to ‘ban’ the use of Russian oil imported by ship by the end of 2022. That accounts for about two-thirds of Russia’s total oil exports to the EU. 

The carveout for Russian oil imported via pipes is a concession to Hungarian Prime Minister Viktor Orbán, who has argued that land-locked Hungary can’t as easily switch to oil from other sources as countries that have ports. 

READ ALSO: Danish energy company refuses to pay for Russian gas in rubles 

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PROPERTY

Denmark opposition wants tax deductions for first-time home buyers 

Denmark’s Liberal (Venstre) party, the largest opposition party, says it wants to make home ownership more affordable in Denmark. 

Denmark opposition wants tax deductions for first-time home buyers 

Under the proposal, first-time home buyers could be given tax deductions on savings set aside for buying a home, newspaper Berlingske reports.

Specifically, would-be homeowners could receive a 20 percent tax reduction on up to 50,000 kroner per year for five years, according to the Liberal plan, which the party is set to present on Monday.

As such, a couple which together saved 500,000 kroner over a five-year period would get a benefit of 100,000 kroner under the proposed tax deduction.

In addition to the tax plan, the Liberals want to spend 100 million kroner yearly building housing, with 122,000 new homes for buyers planned over the next ten years. Municipalities would be given incentives to build more homes with shorter processing times under the scheme.

The Liberals estimate that the savings scheme for first-time buyers would be used by around 50,000 people per year and therefore cost around 1 billion kroner annually.

READ MORE: Danish apartment sales cool to eight-year low  

A reform of job centres and municipal employment services, which the Liberals will also present in the near future, would help to save money which could be spent on the home ownership plan, party leader Jakob Ellemann-Jenses also said in the Berlingske interview.

The Liberals party count with the support of the Conservatives and the Danish People’s Party, although the former party is reported to favour broader tax cuts.

The Social Democratic government opposes the plan. Housing minister Christian Rabjerg Madsen told Berlingske that the proposal would push up house prices in larger cities, forcing people on normal incomes to move away from larger population centres.

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