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Price jump on New Year’s Eve

Vor probably on New Year’s Eve, many petrol stations in Germany are likely to raise the prices for petrol and diesel significantly. The ADAC car club therefore advises drivers to refuel beforehand if they are already on the road. “The prices rise with the first price adjustment in the new year,” said an ADAC spokesman. The big oil companies should go ahead at the petrol stations that are open at night, many free petrol stations should only follow during the day, said Michael Haberland from the “Mobil in Deutschland” car club. The oil company BP indicated that for antitrust reasons they could not reveal the exact time of the price increase for fuel beforehand. In any case, the tills in the gas station shops are already programmed to deduct the higher value added tax from exactly midnight, said Jürgen Ziegner, the managing director of the Central Association of the Gas Station Industry.

“From January 1, 2021, the low prices will definitely be over,” said Steffen Bock, managing director of the Clever Tanken internet portal. Two factors made fuel more expensive: on the one hand, the value added tax will be raised again, on the other hand, the pricing of CO2 emissions will be expanded to include transport. The ADAC expects the price of the Super E10 to increase by 7 cents due to the CO2 price and 3 cents per liter due to VAT, which is about 10 cents more. Diesel will become more expensive by around 8 cents due to CO2 pricing and 3 cents due to the VAT increase, i.e. a total of about 11 cents per liter.

The tax cut was only partially passed on for fuel

The prices for gasoline and diesel had risen continuously in the past few weeks. On a weekly basis, the Super E10 has risen by an average of 2.2 cents to 1.258 euros per liter. Diesel costs 1.146 euros per liter and thus 2.8 cents per liter more than in the previous week. The ADAC considers it possible that the oil companies have already anticipated part of the price increase. There could also have been an increase in demand towards the end of the year because many people wanted to fill up again before the fuel became more expensive. Particularly with a temporary reduction in VAT, it was observed in other countries that some companies had already raised their prices before the date for the tax to be increased again. It is possible that there were similar effects with gasoline. Nevertheless, the car club is now expecting a jump in fuel prices that has not been seen for a long time.

When the VAT was lowered, there was criticism that the tax cut had not been fully passed on at the petrol stations. Economists working on the new economic method Monika Schnitzer had examined this more closely and came to the conclusion that there are differences depending on the type of fuel. According to this, the passing on of the VAT reduction, the so-called “pass through rate”, was 83 percent for diesel, 61 percent for Super E10 and only 40 percent for E5. Apparently, diesel drivers, who are often professional drivers and frequent drivers, are more sensitive to price changes and make greater use of the competition between filling stations. It will therefore be exciting to see whether companies will pass the increase in VAT on to consumers more than the previous decrease.

There was no “run” on heating oil before New Year’s Eve

The price of crude oil had recently risen again with the news about the corona vaccines. It has recently returned to above $ 50 per barrel (159 liter barrel) for the North Sea Brent. If this development continues in the new year, fuel prices will also tend to increase further. An opposing force could be the slow increase in oil production in the new year, decided by the Organization of the Petroleum Exporting Countries (OPEC) and its allies.

In 2021, the oil price could go up, especially in the second half of the year. “The economic recovery will boost energy demand,” said commodity analyst Barbara Lambrecht from Commerzbank. In the winter months, however, Corona will continue to “skid marks”, says the Commerzbank analyst.

All in all, 2020 was an extremely favorable year for drivers. Petrol and diesel were cheaper than they have been for a long time, and that also applies to heating oil. Even that is now becoming more expensive with the turn of the year. The price is likely to rise by around 8 cents per liter due to the CO2 pricing. Whether the old or the new VAT rate applies depends on the time of delivery, not the order. It was expected that many homeowners would have oil delivered to them before the turn of the year in order to take the cheaper prices with them, so that there could be a real “run” on heating oil. But this effect was probably not very pronounced. Many oil traders, however, had apparently raised prices in anticipation of the changes. The energy information service recently reported a “significant” price increase to 58.50 euros per 100 liters with a decrease of 3000 liters.

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