Second most expensive year for fuel prices

Consumers - Second most expensive year for fuel prices - expert expects easing

While the second most expensive year for fuel prices in Germany is coming to an end, the recent fall in prices gives motorists hope that 2024 will be more relaxed at the pump. "For 2024, I am cautiously optimistic that petrol will remain at the current, slightly more relaxed level," says ADAC fuel market expert Christian Laberer. "Diesel could even fall if the typical decline for this time of year comes in the spring with the end of the heating season." Overall, however, it depends heavily on the oil price, which could rise sharply in the event of a global crisis, he adds.

"2023 was not as extreme as 2022, but it was still an exceptional year - and the second most expensive of all time," says Laberer. This is already clear a few days before the end of the year. As long as there are no massive rises or falls in fuel prices in the significant double-digit cent range, diesel will have cost an average of around 1.72 euros per liter for the year, and E10 premium petrol 1.79 euros. Compared to the extreme year 2022, E10 was around 7 cents cheaper, diesel more than 22 cents cheaper.

Strong fluctuations

These averages conceal strong fluctuations. The difference between the cheapest and most expensive day was around 21 cents for E10 and a good 30 cents for diesel. This is mainly due to two opposing developments on the crude oil markets: Shortages on the supply side and weakness on the demand side.

On the one hand, the Opec+ alliance of around 20 countries regained strength and significantly cut its oil production, temporarily driving the price up to almost 100 dollars per barrel (159 liters). However, as the economy weakened, so did demand, which pushed the oil price down again. This was compounded by crises such as the war in Gaza following the Hamas massacre in Israel on October 7 and attacks on ships in the Red Sea by Iran-backed Houthi rebels. As a result, prices fluctuated strongly, but by the end of the year they were back where they were at the beginning of the year - at around USD 80.

Forecast

Experts expect crude oil prices to trend upwards in the coming year. Although large demand regions such as the USA and Europe are likely to experience economic weakness, the commodities experts at Commerzbank expect this to continue. However, growth is likely to pick up in the second half of the year at the latest, including in China. Commodity prices should then start to rise again. The economists at BayernLB expect prices to reach 90 US dollars.

The fact that ADAC expert Laberer still has hope for stable or even falling prices at the filling station is due to the seasonal effect of diesel and the fact that he still sees some room in prices. In addition, a trend from recent months could continue: "Since late summer, the refineries' previously very high margins have been declining. This has also had a positive effect on the price at the pump," he says. "It remains to be hoped that this will continue. The Cartel Office's close look at the ongoing sector investigation into refineries and fuel wholesalers could also help here."

However, a small price jump is to be expected at the turn of the year if the CO2 price rises. According to Laberer, this will mean an additional charge of around 4.3 cents for E10 and 4.7 cents per liter for diesel. "However, it is possible that the oil companies will at least partially anticipate this price increase a few days before the New Year," he says and advises filling up earlier.

ADAC calculation

A rough calculation by the ADAC shows how much the fuel prices will cost consumers. The driver of a diesel with typical consumption and typical mileage will have saved around 300 euros in 2023 compared to 2022, while a typical driver of a car with a petrol engine will have saved just under 60 euros. However, if we do not take the extreme year 2022 as a comparison, but 2021, for example - a rather expensive year in a long-term comparison - things look different: The diesel driver then paid more than 400 euros extra in 2023, the owner of the petrol car a good 200 euros.

However, the price trend in the past year probably did not have a major impact on fuel consumption nationwide. At least that is what the data from the Federal Office of Economics and Export Control (Bafa) on domestic fuel deliveries indicate. So far, they are available for the first nine months and show a slight increase of just under 2 percent to just under 13 million tons for petrol. However, diesel, which is significantly cheaper, fell by just under 4 percent to 24.9 million tons. However, the economic situation is likely to have played a role in the latter, as a large proportion is consumed by trucks. In addition, many companies bought diesel last year to hedge against feared gas shortages in winter.

In contrast, the trend of more and more drivers opting for E10, which is a few cents cheaper per liter, continues. In the first nine months of 2023, it accounted for 25.6% of domestic petrol deliveries. In the same period last year, it was still 23.4 percent.