Consumers: Second most expensive year for fuel prices - experts expect relaxation

While the second most expensive year for fuel prices in Germany is coming to an end, the recent fall in prices gives drivers hope that 2024 will be more relaxed at the pump.

Consumers: Second most expensive year for fuel prices - experts expect relaxation

While the second most expensive year for fuel prices in Germany is coming to an end, the recent fall in prices gives drivers hope that 2024 will be more relaxed at the pump. “For 2024, I am cautiously optimistic that gasoline will be at around the current, somewhat more relaxed level,” says ADAC fuel market expert Christian Laberer. “Diesel could even give way if the decline typical for this time of year comes in the spring with the end of the heating season.” Overall, however, it depends heavily on the price of oil, which can rise sharply in the event of a global crisis, he adds.

“2023 was not as extreme as 2022, but still an extraordinary year - and the second most expensive year of all time,” says Laberer. This is already clear a few days before the end of the year. As long as there are no massive rises or falls in fuel prices in the double-digit cent range, diesel will have cost an annual average of around 1.72 euros per liter, and premium grade E10 petrol will have cost 1.79 euros. Compared to the extreme year of 2022, E10 was around 7 cents cheaper, diesel by more than 22 cents.

Strong fluctuations

These averages hide strong fluctuations. Between the cheapest and the most expensive day there were around 21 cents for E10, and even a good 30 cents for diesel. This is mainly due to two opposing developments on the crude oil markets: shortages on the supply side and weakness on the demand side.

On the one hand, there was a resurgence of the OPEC association of around 20 countries, which significantly cut its oil production and thus drove the price up to almost $100 per barrel (159 liters). But as the economy weakened, demand also weakened, which depressed the price of oil again. There were also crises such as the Gaza war after the Hamas massacre in Israel on October 7th or attacks by the Iran-backed Houthi rebels on ships in the Red Sea. As a result, prices fluctuated greatly, but at the end of the year they were back where they were at the beginning of the year - around 80 US dollars.

forecast

Experts expect crude oil prices to tend to rise in the coming year. The raw materials experts at Commerzbank expect that large demand regions such as the USA and Europe will likely experience economic weakness. However, growth is likely to pick up by the second half of the year at the latest, including in China. Then raw material prices should go up again. The economists at BayernLB expect prices towards 90 US dollars.

The fact that the ADAC expert Laberer still has hope for stable or even falling prices at the gas station is not only due to the seasonal effect on diesel, but also because he still sees some room in the prices. In addition, a development of the past few months could continue: "Since late summer, the previously very high margins of the refineries have been declining. This also had a positive effect on the price at the pump," he says. "It remains to be hoped that this will continue. The Cartel Office's close look at the ongoing sector investigation into refineries and fuel wholesale could also help here."

At the turn of the year, however, a small price jump can initially be expected if the CO2 price rises. According to Laberer, this means an additional burden of around 4.3 cents per liter for E10 and 4.7 cents per liter for diesel. "But it may be that the oil companies at least partially anticipate this price increase a few days before the New Year," he says and advises it's better to fill up earlier.

Calculation of the ADAC

A rough calculation by the ADAC shows how much fuel prices mean for consumers. The driver of a diesel engine with typical consumption and typical mileage saved around 300 euros in 2023 compared to 2022, and a typical driver of a car with a gasoline engine saved almost 60 euros. However, if you don't use the extreme year 2022 as a comparison, but rather 2021, for example - a rather expensive year compared to long-term comparisons - things look different: the diesel driver then paid more than 400 euros in 2023, the owner of the petrol car a good 200 euros.

However, the price development last year probably did not have a major impact on nationwide fuel consumption. At least this is what the data from the Federal Office of Economics and Export Control (BAFA) on domestic deliveries of fuel suggests. So far they are available for the first nine months and show a slight increase of almost 2 percent to almost 13 million tons for gasoline. However, diesel, which was significantly cheaper, fell by almost 4 percent to 24.9 million tons. However, the economy may also have played a role in the latter, as a large proportion is consumed by trucks. In addition, many companies bought diesel last year to protect themselves against feared gas shortages in the winter.

In contrast, the trend continues that more and more drivers are turning to E10, which is a few cents per liter cheaper, when it comes to petrol. In the first nine months of 2023, it accounted for 25.6 percent of domestic gasoline shipments. In the same period last year it was 23.4 percent.

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