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Petrol firms 'sneak profits into price rises'

The Local · 21 Mar 2012, 08:32

Published: 21 Mar 2012 08:32 GMT+01:00

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The study, in the Saarbrücker Zeitung on Wednesday, showed drivers paid nearly €100 million into petrol industry profits over three months.

The industry’s explanations for price rises – different currency exchange rates and Middle East political tensions - could not possibly account for the full weight of price increases, the study showed.

Commissioned by the Green parliamentary party, the study concluded that petrol companies increased their profits on the backs of consumers.

Hamburg environmental expert and study author Steffen Bukold examined the relationship between rising petrol prices and the decrease in the value of the euro versus the US dollar.

Worldwide petroleum prices are based on the dollar, so a depreciation of the euro versus the dollar causes prices in Germany to rise. Prices have also risen in recent months due to tensions in the Middle East.

But Bukold found that the price of super petrol in Germany, for example, rose by 11.3 cents per litre over the last three months, but only 6.6 cents of that could be attributed to increased raw materials prices and the exchange rate.

He concluded that petrol companies earned the extra 4.7 cents per litre off the backs of their paying customers. The difference amounts to €98 million in unexplained extra charges, based on a monthly usage of 2.1 billion litres, Bukold said.

The difference was even more dramatic for diesel, he said. The extra charges amounted to 22 cents per litre by last year.

Bukold said the industry’s claim that the record high petrol prices were purely due to higher petrol prices and the weak euro could not be right.

Germany’s cartel office complained last year about the lack of competition in Germany’s petrol market and Bukhold agreed that cartel-like behaviour was one reason behind the price hikes.

With higher petrol prices once would expect that the companies’ margins would drop too, the study said. But the petrol industry “has not only been able to pass on increasing raw materials prices but has also increased its margins.”

Green party politicians called for the cartel office's powers to be strengthened. Currently the agency did not have enough legal clout “to increase its control and intervene,” the transportation expert for the party, Stephan Kühn, told the paper.

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Bärbel Höhn, deputy leader of the Green’s parliamentary party, blasted the petrol companies, saying they were making “unjustified profits” by overcharging consumers.

But she said the long-term problem was the finite amount of petrol. "As an economy, we have to as quickly as possible set the framework to become independent from petrol.”

The Local/mw

The Local (news@thelocal.de)

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Your comments about this article

11:05 March 21, 2012 by murka
The petrol prices have little correlation with the costs. I wonder why there was such a regulatory effort to cut Telekom and electricity producers off the last mile, where such outrageous vertical binding is allowed for the petrol stations. Same oligopolies are drilling, transporting and pumping into the car tank.

The corrupted system should be broken and we can peacefully use up the rest of the fossil fuels for many years to come. Smaller margins - less war in the middle east.
11:44 March 21, 2012 by wood artist
Gee, this sounds just like the US. They all must use the same playbook. Wonder how much of the price of oil in Germany is affected by speculators...in the US, according to the oil industry, it's nearly 40%. But...Goldman Sachs is making lots of money and paying great bonuses! It's all about the 1% in the US.

12:08 March 21, 2012 by bobmarchiano
Oh yes it is

In the USA gas is at a all time high in a few states at $1.00 a liter

but in most states its only $.75cents

We all pay the same amount for a barrel of oil in dollars

And the Euro is still worth more the a dollar

The gas companies are making more profit just look at the numbers
14:30 March 21, 2012 by Wise Up!
In the US, gov't makes more profit with taxes than the oil companies. I'm sure it is the same in Germany. And gov't does nothing to bring the oil to market. Reduce taxes and you'll reduce gas prices.
14:45 March 21, 2012 by lordkorner
Why anyone goes to an Aral outlet beats me ,they are always 2 to 5 cents more expensive than others. Bought diesel in North West Berlin (Havel Park ) at a Kaufland outlet for 146 per ltr when it was 152 everywhere else, guided there by a handy little app on my phone....
15:12 March 21, 2012 by catjones
Last time I looked, oil/gas companies were publicly traded companies, not government utilities.
16:47 March 21, 2012 by Larry Thrash
Let me see if I understand oil profits from US oil companies are 3-4% from a gallon of gasoline. Governments in Europe tax it at more that 100% and the oil companies are greedy? I see the greed and it's not the people who product it.
18:33 March 21, 2012 by Englishted
@Larry Thrash

Yes it is, but the government are more greedy.

They always put the tax as a percentage so any increase suits them too .

Therein is the problem.
19:42 March 21, 2012 by derExDeutsche
I must say, thelocal.de's Narrative doesn't hold water with many of its readership. one of a few places on the internet where, I believe, the Editorial staff has a small opinion of its subscribers, and kicks the same dead kollektivist horses over and over.
20:03 March 21, 2012 by The-ex-pat
It is not the petro companies that are taking us for a ride, but the governments with tax. This is just a headline to divert the real reason fuel is so expensive. What this story misses out is the basic cost before tax of a litre of petrol. When you look at that price, fuel is not expensive. What is screwing us is the tax. And don't forget, every single cent that it goes up profit or raw cost, the government is laughing all the was to the bank.
21:03 March 21, 2012 by SchwabHallRocks
This is just for those who do not have much insight...

1) In the USA the gas station owner made about .05 / gallon of gas in 2011. The credit card company takes 1 - 3% of each purchase. The owner does not really profit on credit card sales, even less so as the price increases and he must be competitive since credit card expenses is a percentage of the total sale. He makes it on cash sales and the grocery products.

2) Call them "speculators." However, if you own an airline or steel mill (e.g., Lufthansa or Southwest Air) you are THANKFUL (read it! THANKFUL!) that someone is willing to "speculate" and sell you gas in 2013 or 2014 for prices agreed to in 2012. And REMEMBER that futures trading is a zero-sum game. For every "winner" there is a corresponding loser.
22:56 March 21, 2012 by Illogicbuster
Silly people. The German gov makes ~€0.47 PROFIT per liter. MUCH, MUCH more than the oil companies do.

07:28 March 22, 2012 by Englishted
Just because the government is wrong and takes to much tax does not mean that it is alright for the petrol companies to also rip people off on top.

Be THANKFUL that the greedy speculators don't do it with basic foodstuff or people would be dying say wheat ,oh they do .
12:58 March 22, 2012 by murka
I agree with Enlishted. According to TFA the government has little control over the oligopoly situation. Imposing the crazy tax is the only way for them to pull the blanket + since the tax is per liter, the total price is less volatile. in effect petrol products are squeezed from the energy market altogether.

More proper way would be to break up the Big Five oligopoly - ban them from serving the end consumer, create a competitive market place of independent gas stations and refineries - they way it is done on electricity market, etc.
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