Estonian heating costs to rise 30 percent

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TALLINN, Estonia, May 26 (UPI) -- The cost of heating in Estonia is to increase by one-third following a rise in the price of oil-shale oil, Estonia's Aripaev newspaper reported this week.

At an auction held May 19, buyers raised the price of oil-shale oil to $384 per metric ton, leading analysts to forecast a 30 percent increase in the cost of heating.

"The outcome of the auction mean that the price of heat coming from oil-shale oil using boiler houses will rise about one third," said Tiit Rahkema, president of Estonian Power Station and Distant Heating Union.

Rahkema questioned the reasoning behind the increased prices, saying that the cost of oil-shale as a raw material had not increased. "Let's wait and see what is given as the reason for the price increase this time, as last time it was global price increase," he said.

Toomas Hurt, Select Oil NV board member, agreed that the prices were high, but said they were in line with increasing fuel prices worldwide. "The oil price came out as a little too expensive for the moment, but crude oil prices are rising as well," he said.

The production of oil-shale oil in Estonia was state-subsidized until three years ago, when the rising fuel prices as a result of the Iraq conflict made it a profitable concern, said Heido Vitsur, economic adviser to the Estonian economy minister.

"There is no good solution to the heating price increase, we must decide in a couple of weeks what to do next," he said.