GAS PAINS: Fuel in Longyearbyen tops 10 kroner a liter in wake of Ukraine invasion – which is 17 kroner cheaper than on the mainland, but locals are still griping it’s too expensive

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(Editor’s “call it karma” note: As this story was being written Svalbard Auto posted a notice on Facebook that its payment terminal is out of order, so gas cannot be purchased at all during non-business hours. The station is scheduled to be open extended hours from 8 a.m. to 6 p.m. Saturday.)

Gas is selling for an unprecedented high of 27 kroner a liter in some mainland locations and the price is expected to continue increasing due to Russia’s invasion of Ukraine. As such, there’s grumbling among media and motorists about why gas and diesel at Longyearbyen’s only station is barely above 10 kroner a liter, given Svalbard’s remoteness and all.

As it turns out, Longyearbyen residents are also grumbling about the 10 kroner a liter gas, because it’s higher than they’re used to paying.

The strange things afoot at the Circle K in Longyearbyen, operated by Svalbard Auto, are due to the archipelago’s tax rules being vastly different than those on the mainland, Svalbard Auto General Manager Roger Eriksen told TV2.

“Firstly, Svalbard is tax-free, so almost everything up here is sold without VAT and taxes,” he said. “Secondly, the fuel was purchased at a certain time at a certain price. The fuel is then placed in a tank here in Longyearbyen.”

As long as that fuel remains in the tank fuel will be sold for the same price even if oil prices increase, Eriksen told TV2.

But he said customers aren’t happy, even if they’re paying less than half the mainland price for fuel.

“They obviously think that ten kroner a liter for fuel is too expensive,” he said. “The price has been lower before, so ten kroner is more than usual up here. The last time the price went up, it was adjusted by one kroner.”

Adding to mainland motorists likely reasons to be unsympathetic is Longyearbyen has only about 50 kilometers of roads, most of which are untraveled by the vast majority of the population, so it’s not like local drivers are filling their tanks frequently (although since it’s peak snowmobile season plenty of residents are venturing out on long trips that admittedly can guzzle a fair amount of gas).

Meanwhile, on the mainland Øystein Foros, a professor at the Norwegian School of Management has studied diesel and petrol prices for almost 20 years, told TV2 gas prices are likely to keep rising, although by how much depends on how high oil prices go and how long the battle for Ukraine lasts.