The cost of liquid fuels has risen sharply across Europe, incl. and in Greece. This was influenced by the war in Ukraine, sanctions against Russia, the growth of the dollar and the position of OPEC+.
Compared to the current period last year, the largest increase in prices at the European level was recorded for diesel fuel and heating oil, followed by unleaded petrol.
It is indicative that, due to market peculiarities, the prices for these types of fuel for the first time exceeded the prices for 95-octane unleaded gasoline in Greece.
However, this phenomenon, when diesel fuel is more expensive than gasoline, is now observed in most European countries. The reason is the same as before – the main raw material for diesel fuel is the so-called. heavy Russian oil brand URAL. Sanctions against Russia, as well as sabotage on the oil pipeline in Poland, led to a reduction in the supply of this oil, and, accordingly, to a shortage of diesel fuel.
Based on the latest EC pan-European data for 10 October, the average price in EU and the Eurozone for diesel increased by almost 27%, compared to the same period last year (October 25, 2021), according to data presented today by Economikos Tachydromos. The corresponding increase for 95 octane unleaded fuel is about 10%. In Greece, however, this growth is much higher, reaching 36% per annum for diesel fuel and over 14% for unleaded fuel. The OT price map, which shows where prices are set, is typical of the current situation.
Promotions for the sale of heating oil
Average pan-European prices for heating oil also show a jump. There, according to market participants, fluctuations occur constantly, as in the case of diesel fuel in general, which makes the situation more difficult to assess.
But in the end, it matters how much the consumer pays for heat if he uses this fuel. Thus, if in Greece the prices for heating oil are expected to open at the level of 1.44 to 1.49 euros per liter, according to domestic market operators, then the average pan-European prices were at the level of 1.57 euros per liter, according to European Commission.
In Greece at this time last year, prices were about 1.17 euros, while in the EU they were much lower – 0.97 euros per litre. This is more than 24% in Greece and about 63% in the EU. Now it remains to be seen if this “magic picture” in Europe will be temporary, with Platts Mediterranean diesel prices constantly following the lift.
Platts price race
For example: the price of diesel fuel, according to Platts, was $625.7 per ton last year on September 1, and on June 1, 2022, it more than doubled to $1,324.7 per ton. On October 6, it slightly decreased to 1161.7 US dollars.
It is also noted that after the imposition of sanctions against Russia, as well as sabotage on the Nord Stream 1 and 2 gas pipelines, many industries in the EU have abandoned gas and are trying, to the extent possible, to switch to oil products to meet their needs, which has sharply increased demand.
At the same time, the imposition of sanctions against Russia, culminating in the latest sanctions on October 5 on oil exports, has led to the restriction of supplies from the country, which occupies second place in the world in terms of black gold exports.
OPEC+ decision will hit the global oil market
In early October, OPEC+ decided to cut global daily production by 2 million barrels, or about 10%, despite opposition from the United States and other countries. Production cuts could lead to a recovery in oil prices, which fell to $90 a barrel from $120 three months ago.
Based on September global oil production data, a 2 million bpd cut means at least eight oil-producing countries will have to cut production, with actual cuts of around 880,000 bpd at this stage, according to Bloomberg calculations.
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