The Estonian Competition Authority conducted an analysis of the fuel market, highlighting the need for improved oversight and transparency to maintain stable and fair pricing. The market is characterized by a duopoly in wholesale and an oligopoly in retail, with potential concerns about a dominant position in the retail sector.

Estonia's fuel market, although small in volume compared to the EU average, faces high barriers to entry, leading to concentration. The market mainly deals with three types of fuel: 95 and 98 petrol, and diesel. The density of fuel stations is among the highest in Europe, with the highest consumption areas being Harju and Tartu counties.

Market players in the Estonian fuel sector are closely interconnected vertically, potentially allowing competitors in the retail sector to collaborate in wholesale or storage. Pricing in Estonia is closely tied to global market prices and excise duties, with S&P Global Platts quotations serving as a key price indicator. However, local price adjustments often lag behind global price changes, exhibiting a 'rockets and feathers' pricing behavior.

The system for meeting biofuel requirements in Estonia is complex and fragmented, involving multiple public sector entities without a central coordinating body. This fragmentation may lead to siloed approaches, where each authority focuses on its responsibilities without a holistic view.

The Competition Authority's recommendations include enhancing real-time price transparency through independent comparison portals and designating a specific body to monitor the fuel market at the national level. Strengthening market surveillance would promote fair competition, prevent unreasonable price hikes, and protect consumers.