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German petrol prices hover near record highs

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17:45 CEST+02:00
Gasoline prices will remain just below record highs as prime vacation time begins in the German states of Hesse and Rhineland-Palatinate, the Hamburg energy information service EID reported on Thursday.

According to the EID, gasoline prices average €1.54 per litre, and diesel fuel averages €1.51 per litre across the country - just €0.02 short of the record high. EID editor Heino Elfert blamed the high cost of crude oil on the world market for the high prices, but said the strong euro is helping the Germans to avoid the crippling increases seen in the United States.

"In contrast to past years, there isn't an accompanying demand for gasoline from the USA, because use is going down there," said Elfert, adding that a worldwide increase in demand for diesel fuel does not coincide with the downtrend in the US, where drivers have been more strongly affected by rising fuel prices than in Germany.

Gasoline prices this year in Germany have risen by €0.16 - from €1.38 to €1.54 - an increase of 16 percent. In contrast, prices in the US have gone up by 33 percent, or three times more than in Germany. The difference lies in the strong euro, which has buffered prices before they reach German consumers since oil is denominated in US dollars.

Tax differences also effect the two countries differently. German gas tax is around 100 percent, while US petrol tax differs regionally at an average of 10 percent, which means changes in in crude oil costs reach the final gas prices in the US more quickly, he said.

Elfert said Thursday that in past years the US regularly imported oil from Europe because US refineries unable to fill demand. But recently demand has gone down, in addition to increased US refinery capacity.

"There are signals worldwide that demand for oil in quieting," Elfert said, adding that developing nations have also been curbing their use because their governments can't subsidize the high prices.

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