Cheap gasoline sticks around in Germany longer than expected
Fuel prices in Germany have plummeted for four consecutive weeks, causing a liter of Super E10 to cost only 1.698 euros, a reduction of 1.7 cents from the previous week. Diesel, on the other hand, has dropped 1.3 cents, now costing 1.577 euros. This decline in fuel prices stands out, even with Brent crude oil's price inching upward, now hovering around 79 dollars per barrel, as reported by ADAC.
In response to these cheaper gasoline prices, ADAC advises drivers to fill up their tanks between 19:00 and 20:00, or between 21:00 and 22:00. Prices dip significantly during these hours, with a potential savings of six to seven cents compared to the morning rush (7:00). Conversely, prices skyrocket during early morning hours.
The decrease in fuel prices in Germany is more substantial than the recent increase in Brent crude oil's price because of several factors that contribute to the country's unique market dynamics:
- Local supply and demand dynamics: The abundance of gasoline in southern Germany, in conjunction with sluggish demand, has pushed prices lower than the national average. This situation results from refinery outages, reducing the supply, and consumers' reluctance to increase fuel consumption.
- Regional price adjustments: Suppliers in southern Germany have implemented sizeable discounts, slashing gas prices by over €2.20 per 100 liters in the last week. These price reductions are a direct consequence of a balanced gasoline supply and lagging demand in the region.
- National price trends: While Brent crude oil pricing has experienced fluctuations, the global oil demand decrease, particularly in China and the U.S., has led to three-year-low Brent oil prices. However, the reduction in gasoline costs at German fuel stations is not immediately associated with these wider global trends due to specific regional factors.
- Immediate market impact: The impact of Brent crude oil's price changes primarily shows up abroad, whereas the price decrease in Germany is influenced by local supply and demand dynamics, which can prove more reactive to regional conditions such as refinery problems and consumer behavior.
In essence, the decrease in gasoline prices in Germany arises from the nuanced regional supply and demand dynamics that deviate from mainstream Brent crude oil market trends.
