PM: Continued pressure on fuel companies is crucial

Prime Minister Kristrún Frostadóttir says the temporary reduction in fuel price lowered the consumer price index by almost 0.3 percentage points. It was introduced when there was uncertainty over how oil prices would develop. However, oil price rises have not been as severe as the government initially feared. The government decided to temporarily cut taxes on fuel in order to curb inflation after US and Israeli attacks on Iran began this spring. The reduction expired at midnight yesterday and fuel prices went back up by as much as 31 krónur. Kristrún says other factors directly affected by oil prices, which the government cannot control, have been driving inflation. She cites air fares as an example. The authorities need to discuss with labour-market representatives what measures should be taken. Was it disappointing for you to see that petrol perhaps did not fall as much as it should have, given the scale of the VAT reduction? It is, of course, open to discussion how prices developed in the run-up to these changes, and I think it will be absolutely crucial that we continue to apply strong competitive pressure when it comes to fuel companies and others in the general consumer marke