Expensive fuel despite the tank discount: The prices for petrol and diesel at the pumps have recently risen sharply. The temporary lowering of the energy tax since June 1 is considered by critics to have already failed. Federal Economics Minister Robert Habeck (Greens) is under increasing pressure to allow the Federal Cartel Office to intervene in the behavior of the mineral oil companies – and will probably give in to this.
So will the three billion euro tank rebate end up in the accounts of the oil companies instead of relieving consumers? Christian Küchen, General Manager of en2x, the Fuels and Energy Association and successor to the Mineral Oil Industry Association, tries to explain this in an interview with the Handelsblatt.
Mr. Küchen, the so-called tank rebate is causing the state to lose three billion euros in revenue. With most fuels, however, the effect has almost fizzled out again. Are you ripping off consumers and the state?
The opposite is true. The tank discount works. A misunderstanding about the development of gas station prices is currently dominating the discussion: The procurement costs for gas stations are primarily determined by the world market prices for petrol and diesel fuel and not primarily by the price of crude oil. These are separate markets.
How sharply can that be separated at all?
Of course, the cost of crude oil plays a role. But in recent weeks and months, world market prices for petrol and diesel have decoupled from the price of crude oil. If we no longer had the reduced energy tax, the prices would be exactly that amount higher, i.e. 35 cents for petrol and 17 cents for diesel. The reduction comes at the right time, it is needed now more than ever.
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When the rebate was introduced, Total and Shell, who are members of your association, promised to pass the full tax cut on to consumers. The situation at the pumps suggests that they don’t.
Yes they do. This tax cut is being passed on, but world market prices, such as the Rotterdam price quotation, have risen massively over the period, not just in the last few weeks, but in the last few months since the start of the Ukraine war. The costs of the petrol stations when purchasing fuel are based on this.
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Can you explain the described decoupling and thus the price increases?
World market prices are being driven by high demand for gasoline from the USA. Gasoline offered in Rotterdam is often bought by service station operators from the USA…
… where the mineral oil tax is far lower than in Germany.
They are willing to pay a higher price there. That pulls the world market price up. Demand has also increased significantly in Eastern Europe, particularly in the Ukraine. There refineries were destroyed by the Russian attack and can no longer produce. Third, refineries in Western Europe, including Germany, have started gradually phasing out Russian oil since late February. It was not always possible to obtain a replacement immediately. We had a slightly tighter supply in parallel with a growing demand. That leads to these rising world market prices.
“We are convinced that there is no price fixing here”
Economists suspect the oil companies of pocketing the fuel rebate. The criticism is that in the past few weeks they have increased prices at gas stations more than was necessary.
Once again: World market prices have risen continuously in recent months, even before the tank discount. If we look at the price difference between German petrol station prices and the world market price for diesel and petrol, then the curves are almost parallel. The prices at the German gas stations have developed like the world market prices. And the world market prices are not dependent on a German tank discount. They evolve according to supply and demand.
How high is the German price level in a European comparison?
The price increases for fuel in Germany were more in the lower midfield if taxes are excluded. In some other European countries, they were even significantly higher. We can therefore say with a clear conscience that the tank discount will be passed on. But of course we understand the annoyance because it is not visible to the customer.
>> Background: Slight decline in E10 – diesel more expensive again
According to current figures from the Federal Cartel Office, the gap between crude oil prices and gas station prices has increased by three to six cents since June 1st. The margin has increased to around 60 cents per liter.
We understand that the Cartel Office is looking closely at this growing difference. However, we are convinced that this is also a consequence of the development of the world market. In this respect, we are even glad that the cartel office is now investigating to get to the bottom of the matter. We understand the anger, but that prices for crude oil and finished products have developed differently in the past. And if there are shortages in any market segment, for example due to refinery capacities or logistical difficulties, this can of course have an impact on the prices of the products.
What are your hopes for the Bundeskartellamt’s sector inquiry?
That confirms that prices are formed in intense competition. We are convinced that there is no price fixing here. The Cartel Office will have many questions for the companies and will collect data. This is good for clarifying the facts in such a situation and bringing rationality into the debate.
Have your members’ profit margins increased in the past few weeks?
Our members serve the German market, the lion’s share of reported higher earnings in global quarterly results is due to higher crude oil prices. Upstream, in crude oil production, prices have risen. At the moment, however, we have no figures on the extent to which the business in the downstream area, i.e. in refineries and in the distribution business, is affecting the results of the companies. In some cases, the corresponding figures are not even reported by subsidiaries of international oil companies.
Are there other cost drivers in the downstream area?
Processing costs have risen relatively sharply, for example because gas is an important energy source in refineries. Rising energy prices are also having an effect here. The prices for biofuels, which have to be blended to meet the commitments to reduce greenhouse gas emissions, have also increased.
More: No chance for e-fuels: EU Parliament to ban new combustion engines from 2035.