Dusseldorf At ever shorter intervals, the ADAC announces the “most expensive day of all time” at the pump. Because the records only have a short half-life. On Monday, the nationwide daily average price for E10 premium petrol was 2.008 euros per liter, with diesel it was 2.032 euros, as the ADAC announced on Tuesday.
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. Some experts even consider a price of three euros per liter to be possible.
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.
Gasoline & Diesel: Rising prices expected due to Russia sanctions
A phenomenon that is likely to leave many motorists questioning: Suddenly diesel is almost as expensive as petrol. Actually, thanks to tax breaks, the fuel is always cheaper than Super or E10.
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But because Germany has been reducing imports of Russian oil for several weeks, consumers now have to dig deeper into their pockets for diesel too. “The petroleum industry in Germany has already initiated a reduction in imports of Russian crude oil and petroleum products, primarily diesel,” explains the Petroleum Association Fuels and Energy when asked by the Handelsblatt.
Since a replacement for the Russian diesel has to be procured at short notice, the prices for refueling go up. And clearly. The current very high demand for heating oil further exacerbates the problem. “That’s actually atypical of the season, but apparently people are currently buying heating oil because they don’t know how it will be next winter,” explains an ADAC spokesman.
The main reason for the “dramatic price developments” of the past few days is, 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.
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.
>> Read also: US pushes plans to boycott Russian oil
The price of a Brent barrel is now significantly higher: as a result of the discussion about a possible import ban on 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 petrol stations”, as ADAC fuel market expert Jürgen Albrecht told the German Press Agency.
Ukraine war: new highs in oil prices expected
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 not so much the high prices themselves – after all, there have been higher ones in the past – but the “speed of price increases, which puts the adaptability of the economy to a hard test,” says Leuchtmann.
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 run I don’t think that prices at the pump will remain at this high level.” 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 – if not quite to the level that we were used to a few months ago,” says Leuchtmann.
Christian Lindner rules out tax cuts for petrol and diesel
The federal government could also limit the rise in prices at the pump – for example by reducing the value added tax on fuel. Saarland Prime Minister Tobias Hans (CDU) called for a “fuel price brake” on Twitter on Tuesday. Similar demands had previously been made by other Union politicians. VAT, energy tax and the price of carbon dioxide 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 seven cents. The Automobile Club has also recently published tips on fuel hoarding on its website.
However, it is questionable whether this is really still worthwhile 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.