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Global Economy

Tank shock: 1.712 euros per liter – petrol more expensive than ever

Many motorists are being hit by the price shock at the pump these days: According to the ADAC, premium E10 petrol is more expensive than ever in Germany. The old record from 2012 was exceeded – there are various reasons for this.**

On Tuesday, a liter of premium E10 petrol cost 1.712 euros on a nationwide daily average in Germany, as the ADAC announced on Wednesday. The price thus surpassed the previous all-time high of 1.709 euros from September 13, 2012. Diesel cost 1.640 euros per liter – this is also a record.

In recent months, however, fuel has repeatedly reached record highs. Within a week, E10 has increased by 3.1 cents per liter, diesel 2.9 cents.

After a brief recovery last autumn, fuel prices have been rising for weeks. The main driver is the price of oil. Economic and political factors are behind this: supply is scarce and demand is solid. In addition, the political tensions on the Russian-Ukrainian border are causing a significant risk premium on the oil market. Russia is one of the largest oil producers in the world.

"Many motorists are very concerned about the current price trend," says Jürgen Albrecht, fuel market expert at ADAC. But what happens next is extremely difficult to predict. There are too many factors that affect the price. "In addition to demand, there are also international crises such as the one in Ukraine, the dollar exchange rate, speculation and, of course, the further course of the corona pandemic."

Price reductions in sight

But there are also factors that would slow down a further increase in the long term, says Albrecht. "A high oil price makes fracking financially more interesting again, which creates more supply. And it would not be in OPEC+'s interest to have oil prices that are too high in the long term." And at least in the case of diesel, the seasonal effect that this fuel is more expensive in winter due to its similarity to heating oil is likely to subside over the next few months.

All in all, the perception of fuel prices is currently strongly influenced by the development of the past two years, says Albrecht. Especially at the beginning of the corona pandemic, there were very low prices. If, on the other hand, one compares with the old highs from 2012, the price is almost stable. This is due to the fact that the price of oil has always been volatile, sending fuel prices up and down with it.

Especially taxes and duties

A large part of the fuel price at the pump is taxes and duties. With Super E10, at the current price level, this is a good 27 cents VAT, just under 65.5 cents energy tax and the carbon dioxide price, which for E10 without VAT is between 6 and 7 cents depending on the actual biofuel admixture. Because some of these values are constant, this slows down the development of fuel prices compared to oil prices.

The extent to which the rising costs at the petrol pump hit a driver depends above all on his car, his mileage and the question of which fuel prices are being compared. If, for example, Super E10, 12,000 kilometers per year and consumption of 7.5 liters per 100 kilometers are taken as a basis, the monthly additional costs would be a good 23 euros compared to the average price in January 2020 – i.e. before Corona. If you compare it with the low in April and May, it is more than 40 euros per month with the same mileage.

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