ENERGY IN ICELAND - Orkustofnun

Energy pricesElectricity pricesElectricity prices in Iceland are similar tothose in other Scandinavian countries, andWestern Europe. The price for power is generallylower in Iceland, but the distributionand transmission costs are higher. Figure16 compares electricity prices of four ofIceland’s major electric companies to pricesin various European countries, at the beginningof 2006.Prices for space heatingReal prices for hot water and space heatingvary significantly, depending on the energysource. Utilization of geothermal energy isin general the cheapest, but becomes moreexpensive with deeper boreholes, and longerpipelines. Other sources of space heatingare electricity and fuel. Fuel is used ina few regions where there is no access toelectricity other than that which is generatedfrom diesel oil. The price differencecan be seen in Figure 17.Figure 18. Prices of gasoline at end of 2005.Unleaded premium (95 RON) for Europe;regular unleaded for Canada, Japan andthe United States.Figure 19. Composition of gasoline priceat the end of year 2005.Fuel pricesAs all fossil fuel in Iceland is imported, pretaxprices tend to be higher than in OECD.This may at least partially be explainedby the small amount imported, combinedwith long transportation routes. Prices forgasoline and diesel oil have been rising andbecoming increasingly volatile as internationalmarket prices have soared. Figure 18compares the price of gasoline in Iceland tothat of other countries.By the end of 2005, taxes constituted about59% of the gas price in Iceland, of whichVAT was about 20%, see Figure 19.29