Fuel Prices in Germany Experience First Decline in Weeks

For the first time in seven weeks, fuel prices at gas stations across Germany have recorded a decline. According to the latest weekly analysis by the Automobile Club ADAC, the price of Super E10 has decreased by 0.7 cents to EUR1.739 per liter, while diesel prices have fallen by 2.1 cents to EUR1.678 per liter.

This downward trend is primarily attributed to the recent drop in crude oil prices. The North Sea Brent crude was last noted at approximately $77 per barrel, down from over $82 just weeks ago.

Market observers have been analyzing various factors contributing to this price reduction. One prominent influence is the recent political discourse surrounding energy policies, particularly those proposed by former U.S. President Donald Trump, who stated his intention to lower oil prices for American consumers. However, experts remain skeptical about the long-term effectiveness of such strategies.

Moreover, there are questions regarding the participation of the Organization of the Petroleum Exporting Countries (OPEC) in supporting such price reductions. Some analysts suggest that an increase in U.S. economic activity, spurred by Trump's economic policies, could potentially boost oil demand, thereby stabilizing prices rather than allowing them to decline further.

Other factors influencing the oil market include a gradual easing of tensions in the Middle East and diminishing concerns over supply disruptions following U.S. sanctions targeting Russian shadow tankers. Additionally, fluctuations in the stock market, particularly the recent sell-off of technology stocks, have heightened investor risk aversion, further affecting oil prices.

After the Trump election last year, gasoline prices in Germany experienced an initial increase, driven by contrasting expectations about his administration's impact on oil supply and demand. While some anticipated that Trump would favor increased U.S. oil production leading to greater supply, others feared that his policies could create inflationary pressures, influencing the oil market negatively.

At the start of the year, gasoline prices rose in Germany partly due to an increase in the CO2 price applied to fossil fuels, which accounted for an additional cost of 2.8 cents per liter for gasoline and 3.2 cents for diesel, including VAT. However, the overall impact of this change appeared to be limited.