Two of the leading Icelandic gas station chains' shares took a tumble in the stock exchange yesterday when American retail giant Costco opened a filling station offering significantly lower prises. A director of one of the chains says the company will not react specifically to Costco's arrival on the market.
The petrol price offered at Costco's filling station was around 30 ISK lower per liter than those offered at local chains N1 and Skeljungur, around 15% cheaper. Consequently, shares of the two local competitors sunk by 5% and 2% respectively yesterday, according to local news site Mbl.is.
Valgeir M. Baldursson, director of Skeljungur, told local news site Vísir that his company could well compete with Costco and there was no reason for it to react. He was confident consumers would choose convenience and service over Costco's lower prices.
Read more: Costco grand opening in Iceland today: See what the store looked like during sneak peek opening
The chairman of the local automobile association FÍB said Costco's lowering of petrol prices proved claims that markup in Iceland was significantly higher than in neighboring countries, according to Vísir.
Not everyone was pleased with lower gas prices at a time the world's governments are trying to reduce carbon emissions to combat climate change, though. Árni Finnsson, chairman of the Icelandic Nature Conservation Organisation, implied that Costco was subsidizing petrol, saying the practice should be outlawed.
Two of the leading Icelandic gas station chains' shares took a tumble in the stock exchange yesterday when American retail giant Costco opened a filling station offering significantly lower prises. A director of one of the chains says the company will not react specifically to Costco's arrival on the market.
The petrol price offered at Costco's filling station was around 30 ISK lower per liter than those offered at local chains N1 and Skeljungur, around 15% cheaper. Consequently, shares of the two local competitors sunk by 5% and 2% respectively yesterday, according to local news site Mbl.is.
Valgeir M. Baldursson, director of Skeljungur, told local news site Vísir that his company could well compete with Costco and there was no reason for it to react. He was confident consumers would choose convenience and service over Costco's lower prices.
Read more: Costco grand opening in Iceland today: See what the store looked like during sneak peek opening
The chairman of the local automobile association FÍB said Costco's lowering of petrol prices proved claims that markup in Iceland was significantly higher than in neighboring countries, according to Vísir.
Not everyone was pleased with lower gas prices at a time the world's governments are trying to reduce carbon emissions to combat climate change, though. Árni Finnsson, chairman of the Icelandic Nature Conservation Organisation, implied that Costco was subsidizing petrol, saying the practice should be outlawed.
