Dusseldorf Last Monday, the ADAC proclaimed the “most expensive day ever” at the pump. This record, so much is now certain, did not last long: according to the automobile club on Sunday, a liter of Super E10 cost 1.965 euros on average across Germany, and 1.984 euros per liter of diesel. That topped the values from the beginning of the week (1.816 and 1.737 euros) again significantly – in the case of diesel even by more than ten percent.
For weeks, one price record has been chasing the next at the pump. On average, a tank load is more than a quarter more expensive today than it was a year ago. And there is no end in sight to this development – on the contrary: the war in Ukraine and the associated sanctions against Russia could cause fuel prices to rise further.
All the more so if an import ban on Russian oil were decided, which the USA and the EU want to discuss these days. Because the most important price driver at the pump is the oil price – and Russia accounts for about ten percent of global oil production.
The main reasons for the “dramatic price developments” of the past few days are, on the one hand, “the expectation that western countries could also sanction oil exports,” says Ulrich Leuchtmann, head of the foreign exchange and commodities research department at Commerzbank. On the other hand, there has already been a morally motivated “anticipation of possible Western sanctions policy by oil buyers”. “Regardless of what is legally possible or not, Russian oil producers have recently had difficulties finding buyers,” says Leuchtmann.
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Germany’s dependence on Russian oil has recently been particularly pronounced in an international comparison. According to ADAC figures, just over a third of the crude oil purchased in this country came from Russia last year. In the current situation, this is “extremely burdensome for fuel prices,” the automobile club said last week. At that time, the price of a barrel of Brent crude oil had risen by around four dollars to just over 100 US dollars within a few days – a development that was already noticeable at the pump at the weekend.
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The price of a Brent barrel is now significantly higher: as a result of the discussion about a possible freeze on imports of Russian oil, it temporarily rose to 139 dollars on Monday night. It even approached its all-time high of $150 from 2008. So it’s no wonder that on Monday there was again “a clear upward trend at the gas stations”, as ADAC fuel market expert Jürgen Albrecht told the “dpa”. If the two-euro mark is exceeded at the pump, it should no longer surprise anyone, says Albrecht.
Expect new highs
If oil exports from Russia are now completely eliminated, oil prices are likely to climb even further – and with them petrol and diesel prices. Commodity analyst Ulrich Leuchtmann believes that an embargo on Russian oil “is priced into the oil market with a relatively high probability”. It is not unlikely that oil prices will exceed their highs from Monday morning again in the coming days. The main problem is less the high oil prices per se – after all, there have been higher ones in the past – than the “speed of the price increase, which puts the adaptability of the economy to a hard test”.
In return, Iran could soon be exporting significantly more oil again, at least a corresponding agreement with the USA recently seemed within reach. But even a return of Iranian oil to the world market would probably not provide sufficient compensation for the lack of oil supplies from Russia: Iran can export a maximum of 2.5 million barrels of crude oil per day, but Russian crude oil exports amounted to 4.6 million barrels per day, it was calculated Ulrich Leuchtmann’s team of analysts on Monday.
Nevertheless: “In the long term, I don’t believe that the prices at the pump will remain at this high level,” says Leuchtmann. Either, he suspects, there will be no embargo on Russian oil at all. “And the moral self-sanctioning of Russian suppliers on the oil market will also decrease.” Or Saudi Arabia will ensure that oil prices normalize again. “They would have enough free capacity to push the oil price down again. And such a high oil price cannot be in their long-term interest.” Both options would ensure that “oil prices and thus fuel prices will fall again – even if not quite to the level that we were used to a few months ago ‘” said Luminant.
Hope for politics in vain
The federal government could also limit the rise in prices at the petrol pump – for example by reducing the value-added tax on fuel, as several opposition politicians had recently called for. Because value added tax, energy tax and carbon dioxide prices currently make up a large part of the final price for petrol and diesel. However, Federal Finance Minister Christian Lindner (FDP) recently explicitly ruled out tax cuts for fuel. Such a measure means new debts, said Lindner on Sunday on “Bild TV”. He was against “that we take a loan from our grandchildren for the current increase in fuel prices”.
As long as fuel prices remain at their current level, the ADAC advises motorists to compare gas station prices with relevant apps and to fill up in the evening rather than in the morning. That could save you up to 7 cents. The Automobile Club has also recently published tips on fuel hoarding on its website.
However, it is questionable whether it is really still worth it at the current prices: “Filling up the tank now is a bet that new sanctions will come and prices will continue to rise,” says commodity analyst Ulrich Leuchtmann. “I wouldn’t advise putting 20 liter cans of fuel in the basement now.”
More: The price of oil is nearing its 2008 record high. A complete ban on Russia from the world market could push the price up to $200.