Petrol price above 2 euros per liter for the first time ever

That the petrol price would exceed €2 was in line with expectations. Recently, fuel prices have been breaking record after record, with the suggested retail price in the most recent report being €1,989. Today, on Friday 1 October, the suggested retail price for a liter of Euro 95/E10 will exceed the magical €2 for the first time ever.

That the price is a record is also apparent from figures from consumer collectives United Consumers. That has been keeping a close eye on fuel prices since November 7, 2000 and has never recorded an amount of more than €2 before. Diesel and a liter of LPG are also more expensive than ever. The suggested retail price of diesel is today €1,659, that of LPG was €1,026.

The fact that fuel prices are so high is partly because the demand for oil has increased recently. Many economies are revived now that the corona crisis seems to be largely behind us, and that comes with a lot of energy consumption. At the same time, oil-producing countries are not pumping up as much oil as they could. As a result, fuel remains relatively scarce, which causes the price to rise. The price of a barrel of North Sea oil (Brent) is currently over 80 dollars. That is the highest point in three years. Also a barrel of American oil (WTI) has not been this expensive in three years.

Excise taxes are also higher

Another factor is that the tax on fuel increases every year. For example, the oil price in 2008 was much higher than now, but then you paid much less tax on a liter of fuel. At the moment, almost 10 cents more excise duty is levied on a liter of petrol than ten years ago.

VAT is also levied on the higher excise duty. In addition, the VAT percentage has gone from 19 to 21 percent in the meantime. As a result, you now pay more at the pump than when the oil price was at a record high in 2008.

The fuel prices in our neighboring countries are a good example of the magnitude of this effect. In Belgium, Shell uses a recommended petrol price of €1,647 for 1 October, while the same liter of E10, according to benzinpreis-aktuell.de, costs €1,631 in Germany.

Prices are not falling for the time being

Motorists will probably have to get used to the high prices, because refueling is not expected to become cheaper any time soon. “Fuel prices could still rise a little further,” said United Consumers’ Paul van Selms. However, he thinks that the increase will not increase too far. “That is not in the interest of oil-producing countries. If the price gets really high, there will be so much pressure on those countries that they will lower prices,” explains Van Selms.

“In addition, there is a risk that if oil prices get really high, for example more than €100, they could fall sharply at some point, maybe even halve. The oil producers certainly do not want that. Many countries, for example Saudi Arabia, are largely dependent on the yields of oil. If those prices fall sharply, they have a big problem.”

Incidentally, it is certainly not the case that you pay €2 per liter at every gas station. Many gas stations offer discounts on the suggested retail price. As a result, you can refuel cheaper in many places. According to CBS, the average pump price for Euro 95 in August, when the suggested retail price still fluctuated around €1.97, was €1.836. Anyone who went to refuel at an unmanned pump even lost an average of ‘only’ €1,790. Obviously cheaper, but still very expensive.