- Why is gasoline not as cheap as it has been for a long time?
Those standing at the pump these days might wonder: At around 1.60 euros per litre, diesel prices are as low as they were 13 months ago. And petrol is as cheap as 1.70 euros, a level not seen in six months.
This is a boon for holidaymakers – and a rarity, especially considering the ongoing conflict in Ukraine and escalating tensions in the Middle East. In the past, these factors have driven price increases.
So, how is this possible?
Why are fuel prices so low?
Hagen Reiners, an oil price expert at information service Argus Media, explains: "The answer to this seemingly simple question is actually quite complex. In general, prices for the raw product, crude oil, have decreased somewhat." Another factor is that profit margins for refineries, particularly for diesel, have significantly decreased in recent months.
"Oil demand is currently being assessed as somewhat subdued, for example due to weak economic data from the US," says Reiners. This leads to cheaper end products, diesel and petrol, at the pump. An important factor is also the Organization of the Petroleum Exporting Countries (OPEC). "OPEC is actually planning to increase production. These were reduced in October last year to stabilize the high price."
ADAC: "Whether prices will remain this low remains to be seen"
Andreas Hölzel, an expert on the topic at ADAC, says: "The low fuel prices are due to favourable market conditions, particularly the oil price. North Sea oil, which is relevant for us, had a very low price of around 76 to 77 US dollars per barrel last week." However, the price is currently rising again. The previous price drop was mainly due to a weak global economy, particularly in the US, China, and Europe.
"The current moderate price increase could be linked to growing tensions in the Middle East. Concerns about further escalations there can increase the oil price. In general, fuel prices are low when the oil price is low," confirms Hölzel, echoing Reiners' views. "Last week marked the lowest point for petrol in the past six months and the lowest for diesel in 13 months. This was beneficial for motorists, especially during the travel season. Whether prices will remain this low remains to be seen."
The low fuel prices can be attributed in part to a decrease in profit margins for diesel refineries, as mentioned by Hagen Reiners. Additionally, the Organization of the Petroleum Exporting Countries (OPEC) is planning to increase production, which has contributed to the decrease in diesel engine fuel prices.
