PetrolPlaza Scandinavian Special: Discussing the Finnish market with Mika Hokkanen
With around 2,000 gas stations, Finland represents another example of a Nordic country which has decided to bet on a sustainable future by investing in biofuels. We speak to Mika Hokkanen, CEO of the Finnish Petrol and Traffic Service Retailers Organisation (SBL), to learn more about the current state of the Finnish fuel retailing industry.
What big changes have occurred in Finland´s fuel retailing market?
In Finland, retailers sell fuel either on commission or by buying it themselves first. Fuel stations led by entrepreneurs have been expanding their services for customers for a long time now; investing in other services alongside selling fuel, which still represents the core business.
The objective of wholesalers in the long run seems to be the growth of their own volumes and shares of the fuel market. For some, this can be seen as harmful due to unhealthy pricing practices by oil companies on their automatic fuel stations.
Finland has made big investments in biofuels and other alternatives. It is also the home to Neste, one of the leading countries for renewable fuels in the world. How is this trend developing in the country?
Finland is very forward-looking and among the first countries when it comes to the commitments on bioenergy. The good side of this is that we have been able to proceed by agreements and without regulatory obligations. Our concern as retailers is the costs for the equipment and the forecourt, which are unavoidable consequences of these kind of changes.
The S-mobile app allows users to manage their fuel operations at the ABC gas stations in the country. How big of a trend will mobile payments become in Finland?
It seems evident that mobile payments will become more and more common in fuel operations as well as in any other branches of the business. At the moment it is still in the beginning of its life cycle but it will certainly grow in the future.
How would you describe the current state of the country´s fuel retailing industry?
Entrenepreurship is the key word in this matter. We believe it will remain so in the future. Retailers would like to see growing competition, especially in the wholesales, which always has an impact on retailing. The current situation of the fuel wholesale industry is not very healthy because the business is concentrated in the hands of a few players. This limits the possibilities of tendering for retailers.
What would you say are the biggest challenges facing the industry?
In the long run, it will be the use of renewable sources of energy alongside fossil fuel. And not only using them, but doing it in a cost-effective manner for the business. For example, electric cars coming forward and making their charging a part of the retailers´ business.
