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European Gasoline Prices Near All-Time High

22 May 2007

by Rafael Seidl

Germany’s automobile association ADAC reports that this past weekend, drivers in that country faced gasoline prices of €1.41 per liter (US$7.10 per gallon). This is just €0.03 below the historic high reached after hurricane Katrina.

The recent rise in the price of oil does not, in ADAC’s view, justify such increases in prices at the pump. A spokesperson suggested there was room for discounts, implying that refineries have increased their margins ahead of the summer driving season.

In addition, chronic refinery capacity shortfall in the US means that country has to import large quantities of finished gasoline and blending products on the spot market in Rotterdam, mostly supplied by European refineries. For reference, the EIA estimates that roughly 1 in every 8 gallons consumed in the US is imported. Refinery capacity is expanding in the US, but more slowly than demand is growing. Thus, the problem is actually getting worse each year.

Analyst Michael Braeuniger of the World Economic Institute in Hamburg expects prices at German pumps may go as high as €1.60  per liter (US$8.15 per gallon) this summer. He blames a combination of a sales tax hike earlier in the year and continued robust growth in the global economy.

In Switzerland, Austria and Poland, gasoline prices currently range from €1.00 to €1.13. The difference is due mostly to national fuel tax rates. The EU can harmonize these only very slowly because any change requires the unanimous consent of all 27 member states. ADAC therefore expects an increase in fuel tourism, which skews tax revenues, CO2 emissions statistics and the associated trade in certificates and also generates additional CO2 emissions.

If prices at the pump continue rising, will European consumers force their government to intervene in the spot market to drive prices down in Europe and up in the US?

Resources:

May 22, 2007 in Europe, Fuels | Permalink | Comments (50) | TrackBack (0)

Comments

Well. I didn't expect to ranted at ... so let me rant back.

Patrick & DieselHybrid,

I don't know whose statement you think you were correcting but it wasn't mine.

Diesel was NOT one of the alternatives I asked about. It is no more a long-term solution to clean air and oil independence than gasoline is.

As far as American vehicles being inefficient, this is a narrow view of the term "efficiency". A vehicle has more objectives than simply getting from point A to point B. Progress is when you improve on all those fronts, not sacrifice in some areas to improve others. When someone points to a small, ugly, boxy, smelly diesel that rattles your teeth at anything over 60mph and tells me it is efficient, they are wrong. It completely fails to meet some of the objectives of a personal transportation vehicle. It may be energy efficient, but it is horribly inefficient at meeting those other objectives of speed, comfort and safety.

I want it all. Clean, powerful, comfortable, renewable. The alternatives I listed are all of those, and cheaper than $5/gal petroleum fuel. I don't want to be told I've got to compromise when real alternatives are possible.

And the next time you think speed, comfort and safety are a bad thing, tell some 3rd world villager how much you admire their rustic existence. They'd trade with you in a minute. Some Americans are filled with such a combination of self-loathing and envy that they would only be happy if success was redefined as living in a 200sft shack and riding a bicycle.

There is absolutely NOTHING wrong with an energy intensive lifestyle.

Posted by: Kirk Ellis | May 22, 2007 at 04:25 PM

Kirk:

You just didn't drive a modern diesel car :) There's no rattling, the engine is pretty quiet and has very good performance, sometimes better than gasoline (BMW is using diesels in high performance cars). I drove Peugot with HDI and can tell tyou would be satisfied.
As for the lifestyle - energy intensive life style is nice but short...

Posted by: Jaros | May 22, 2007 at 04:38 PM

Jaros:

Yes, but this would be underutilization of fairly expensive hydrockraking installations. Funny thing, outdated East European refineries with low-yield of light fractions (gasoline) are working full-swing to supply excess diesel fuel to Western Europe.

Kirk:

It is nothing wrong to be big and strong, but it is bad to be overweight. Energy intensive lifestyle we enjoy here in N. America is quite wasteful and energy (and money) inefficient. That’s to say, it is extremely important for economy to grow and being competitive to increase energy use efficiency. Demise of USSR economy was in fact greatly accelerated by awful energy inefficiency on all levels.

And yes, modern diesel cars are vastly better than you describe.

Posted by: Andrey | May 22, 2007 at 05:28 PM

While the oil prices are relatively stable between 60 - 65 $ / barrel, the gas prices are skyrocketing.

Is it possible that light crude oil yields more gasolene and that is in short supply.

Its getting difficult.

Posted by: Max Reid | May 22, 2007 at 05:55 PM

A bit off topic, but I want to show folks Bussard's Polywell Fusor. Who knows? Cheap fusion energy might just be under our noses. Looks like something right out of Star Trek. But they need money to continue research.

It's the phrase on the second page that really caught my eye: "Successful Phase 2 marks the end of fossil fuels".

Posted by: Cervus | May 22, 2007 at 06:05 PM

Cervus, any "science/technology" program that solicits the public for money smells of scam to me.

Posted by: marcus | May 22, 2007 at 06:21 PM

Perhaps I should I have had my sarcasm detecter on a bit higher...

Posted by: marcus | May 22, 2007 at 06:23 PM

Driving one of the few "modern" diesel cars w/cat/DPF in NA, Im still POd that whilst we finally get ULSD (>15ppm sulpher), the cetane rating stickers are either missing or still say 40. Consequently I/we have more smoking and sticking EGR valves and then more disdain for "dirty diesels". Almost even worse if mixed with bioD as invariably it will be blamed. Big Oil (BO) WTF is so hard about getting minimum cetane over 45.

Thank W, Cheney, Rumsfeld etal, the myopic band of chicken-hawks and their GLOBAL WAR ON TERROR. 15 of the 19 9/11ers were SAUDIS, not Iraqis...chasing UBL I get...chasing SH I never did. "Fightin'em over there, so we dont have to fight'em over here"? Has this idiocy cost us all(but esp our heroes and their families)$3Trillion+ yet DICK?? Are we "feeling" safer yet? 1/20/09 cant come quick enough.

Posted by: fred@dzlsabe.com | May 22, 2007 at 06:33 PM

Jaros:

I have no doubt that diesels have gotten better since I last looked at them closely three years ago. And it isn't impossible to build a comfortable, powerful, quiet, fast vehicle with any sort of motive power. However ... those are not the vehicles people point to in my experience when they go on a rant about how little fuel their diesel car uses. Their car usually fits the description I gave -- what to me is an unacceptablly compromised vehicle.

And I do not consider diesel a fuel with an unlimited future. Even biodiesel. If biodiesel from algae or other non-food crop was prevalent, then it would at least be renewable. As it is now, they are touting biodiesel but they are making it from food crops like soy beans. That makes no sense to me. Deplete soil and use those calories in a vehicle rather than feed people ? Why do that when nuclear, geothermal, wind, and waves could create all the renewable electricity we need and not take food from people's mouths ? Those non-fossil generation methods are the equivalent of less than 3 cents per mile driven in an electric vehicle with all the power, speed, safety, cleanliness and comfort people want.

Battery replacement costs add a ridiculous 8 cents per mile today, but even including that cost it totals less than $5/gal petrol in a 45mpg vehicle. And batteries will be cheaper than 8 cents/mile by the time you need to replace them.

I keep coming back to my original question. Europe has been past what we think of as the 'tipping point' in fuel prices for years, and still no big move to electric. If Europe hasn't, then why would the US be any different ? If Americans just continue to absorb the higher fuel costs, then aren't higher gas taxes just an scam to give money to the most inefficient spendthrift organization in world history ?

Posted by: Kirk Ellis | May 22, 2007 at 06:56 PM

Marcus:

Dr. Bussard is qualified in his field, and he's shown progress since the project's inception in the mid-90s. I strongly doubt that a scientist of his stature would be involved in a scam. Frankly, given that ITER will cost a minimum of $10 billion with no guarantees it'll actually work, this technology's development costs will be less than a tenth of that. It's certainly worth the funds, IMO.

Posted by: Cervus | May 22, 2007 at 07:31 PM

Ok Cervus. I read a bit more about it all. Seems legit.

Posted by: marcus | May 22, 2007 at 08:15 PM

there are developments in DMe in China today!
Currently, the market trend today is such that many Chinese coal chemical companies are moving towards optimising low cost and abundant coal feedstock for expansion into DME production.

If you would like to know more on COAL to Syngas to DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:


DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

For more information: www.iceorganiser.com,

Posted by: Cheryl Ho | May 22, 2007 at 09:20 PM

There are DME developments in China today!
We see great potential for DME as a clean alternative fuel . The present diesel oil is a major source of air pollution from diesel engine of trucks and busses in large city like Tokyo. The potential market of diesel oil substitute is larger than LPG. DME is one of ideal fuel for diesel engine. DME vehicles were demonstratively manufactured in Japan, China and Korea and their driving test already started. Practical durability fleet test of a DME truck is under going in Japan.

We are pleased to organise a conference on China taking the lead in the DME market in production from coal and Japan and Korea activities.

If you would like to know more on COAL to Syngas to DME developments, join us at upcoming North Asia DME / Methanol conference in Beijing, 27-28 June 2007, St Regis Hotel. The conference covers key areas which include:


DME productivity can be much higher especially if
country energy policies makes an effort comparable to
that invested in increasing supply.
By:
National Development Reform Commission NDRC
Ministry of Energy for Mongolia

Production of DME/ Methanol through biomass
gasification could potentially be commercialized
By:
Shandong University completed Pilot plant in Jinan and
will be sharing their experience.

Advances in conversion technologies are readily
available and offer exciting potential of DME as a
chemical feedstock
By: Kogas, Lurgi and Haldor Topsoe

Available project finance supports the investments
that DME/ Methanol can play a large energy supply role
By: International Finance Corporation

For more information: www.iceorganiser.com

Posted by: Cheryl Ho | May 22, 2007 at 09:23 PM

Kirk Ellis (there is nothing wrong with energy intensive lifestyle):

30 years ago a colonel of the soviet army was asked about the high gas consumption of USSR vehicles. He said "this is not a problem, we've got a lot of fuel".

Don't you think that you are on the same wrong way as they were, if you do not realise that the first thing to do is to get out of the SUV and sit into a small car (diesel or gas powered, it doesn't matter, just SMALL)?

Last week I saw a Ford F 150. Here in Europe it looks like a giant even if it stands next to the SUV-s that are common in Europe (Toyota RAV-4, Hyunday Tucson etc). This is just not the car size for carrying people. This is the car size for carrying heavy loads.

Posted by: my name | May 23, 2007 at 12:43 AM

Kirk:

I agree that BEVs, HEVs and PHEVs have advatages in some fields, but they have (BEVs especially) serious drawbacks in terms of cost, range, availability, use style and serviceability, wich are important to oridinary customer. They are especially useful in urban areas and have far less sense when used in cruising - in that field modern diesel will beat it. And when you are using range extender, it will turn your BEV into SHEV, maybe with diesel genset :) (I found interesting concept from Delphi developing HC fueled SOFC APU capable to serve as range extender).
As for the use of food-derived fuels, in EU for example there're regulations to limit food productions to avoid large surplus. While rapeseed oil is not capable to replace petrol diesel in 100%, it's possible to utilize this surplus to obtain let's say 10-20% shift. And dont say it would be used to help developing countries by sending this food surplus - while it's necessary in emergency conditions, in long term it will kill their ecomomy by supressing local food producers.
You are saying that EU high taxes on fuels didn't force teh switch to alternative sources - you are partially right. We dont't drive electric cars because the are wwell suitable yest for customers seeking for comfort and ease of use, and as I explained, these taxes serve to social-bloated national budgets and not to alternative fuels (I treat electricity like a kind of fuel) users and developers. Decrease fuel taxes by 30% and you will ruin Polish budget. This economical presson rather pushed people to use public transport, to own more economical vehicles, to optimize their commuting and to use illegally fuels not intended for transportation, so don't say there is no impact of high taxes :)

Posted by: Jaros | May 23, 2007 at 01:11 AM

Free trade at the Rotterdam spot market? So we (Europeans) pay for the "driving season" caused by profligate consumpton caused by untaxed US prices? In effect we are subsidsing the US because we don't consume as much!

Intervene in the spot market I say!

Posted by: Ruaraidh | May 23, 2007 at 03:30 AM

Larger cars will be a moot issue in three years of the rising price environment. SUV sales will plummet. We Americans are fat and lazy, we love to supersize everything. We love having the ability to have a giant car for safety and comfort, not to mention to not have to bend over to get groceries out, or to not to struggle as we plop our five chunky kids into the back on the way to soccor practice. But we Americans are not idiots. As the price of gas increases, our legions of soccor mom suburbanites will go back to griving smaller mini-vans and station wagons. Our rough and rugged red necks will trade in their V-8 hemis for smaller V-6, or (heaven forbid!) 4 cylinder trucks. Diesel will be a tough sell. The late 70's and early 80's did a number on many consumers with diesels thought of as loud and dirty. The more progressive folks may go for it - but our surburbanites will embrace Hybrids and Plug-ins long before we accept diesel. But no matter what the fuel technology - larger cars will go away like they did for nearly 20 years through the 80's and 90's.

Posted by: eric | May 23, 2007 at 07:10 AM

The reason IMHO why Europeans don't shift to EVs are pretty simple:
-there are no usable EVs available
-no EU-wide rapid power charge infrastructure
-simply no viable E-energy storage system on the market
(recharge time, price, power density)

Which means right now the only way to move cost-efficient here in old europe (YAOTM rumsy yr a sucker) right now is diesel or biodiesel. Purposely not mentioned cars addicted on russian gas.

I would buy an EV tomorrow if they could be charged in 10 min @ €25-30k ASP plus the possibility to charge on almost any EU major "gas" station.

My crystal sphere says I can buy such a clean vehicle in about a decade. Imagine, almost clean air in big cities.
Lecker.

Posted by: krautreloaded | May 23, 2007 at 09:00 AM

andichrose,

I am a great believer in what the US EPA and government has done to clean up the environment, by using the Law. No diesel until it's as clean as at least lower (dirtier) rated gasoline powered vehicles in emissions.

Why are the Green governments of the EU delaying the European equivalent of T2B5 until 2014 when the US implemented its equivalent in 2007. Now 2007 was too soon but the manufacturers will have vehicles to offer in 2008; six years before the EU will set an equivalent of even weaker standard in Europe-6 standards?

Fact is the US is very efficient in its vehicle fleet. It is just not all expressed in mileage figures. Safety, size, and performance have all been addressed too.

Lower fuel prices reduce the price of the myriads of goods produced in the USA, and contribute to the highest productivity per capita in the world by the USA economy.

I am not a European but I travel there. I was ASTOUNDED at how bad the air had gotten there after a hiatus in visiting Europe for almost a decade. The EU cities literally STINK of diesel smell, and they didn't used to be that way.

All the professional worry warts keep telling us how taxing to increase the price of fuel is good for us.

I respectfully disagree.

Giving the money to government provides no money for more wells or most importantly, more refinery capacity.

Lack of Refinery Capacity is what is driving this jump in auto fuel prices and that comes from NIMBY-ism in the developed world. Higher fuel margins reward the Oil companies to build more refinery capacity.

If the NIMBYs won't allow it in the US or EU, it will still get built in the undeveloped world, but it will get built, if the resources exist to do so. Taxing fuel to give to bureaucrats, just doesn't provide the means through expansion to relieve the refinery shortage; it merely funds political hot air and make work bureaucracies.

Many have inquired why the high (TAXED) fuel prices didn't lead to better (electrified) vehicles. These people believe in conspiracies and not reality, unfortunately. If the money were available to do the Research and Development by the Auto manufacturers and to invest in the factory infrastructure, you would have better (i.e. HEVs, BEVs) vehicles. But instead you in the EU gave the money to politicians who consume but produce nothing.

Posted by: Stan Peterson | May 23, 2007 at 12:02 PM

andichrose,

I am a great believer in what the US EPA and government has done to clean up the environment, by using the Law. No diesel until it's as clean as at least lower (dirtier) rated gasoline powered vehicles in emissions.

Why are the Green governments of the EU delaying the European equivalent of T2B5 until 2014 when the US implemented its equivalent in 2007. Now 2007 was too soon but the manufacturers will have vehicles to offer in 2008; six years before the EU will set an equivalent of even weaker standard in Europe-6 standards?

Fact is the US is very efficient in its vehicle fleet. It is just not all expressed in mileage figures. Safety, size, and performance have all been addressed too.

Lower fuel prices reduce the price of the myriads of goods produced in the USA, and contribute to the highest productivity per capita in the world by the USA economy.

I am not a European but I travel there. I was ASTOUNDED at how bad the air had gotten there after a hiatus in visiting Europe for almost a decade. The EU cities literally STINK of diesel smell, and they didn't used to be that way.

All the professional worry warts keep telling us how taxing to increase the price of fuel is good for us.

I respectfully disagree.

Giving the money to government provides no money for more wells or most importantly, more refinery capacity.

Lack of Refinery Capacity is what is driving this jump in auto fuel prices and that comes from NIMBY-ism in the developed world. Higher fuel margins reward the Oil companies to build more refinery capacity.

If the NIMBYs won't allow it in the US or EU, it will still get built in the undeveloped world, but it will get built, if the resources exist to do so. Taxing fuel to give to bureaucrats, just doesn't provide the means through expansion to relieve the refinery shortage; it merely funds political hot air and make work bureaucracies.

Many have inquired why the high (TAXED) fuel prices didn't lead to better (electrified) vehicles. These people believe in conspiracies and not reality, unfortunately. If the money were available to do the Research and Development by the Auto manufacturers and to invest in the factory infrastructure, you would have better (i.e. HEVs, BEVs) vehicles. But instead you in the EU gave the money to politicians who consume but produce nothing.

Posted by: Stan Peterson | May 23, 2007 at 12:02 PM

Cervus,

To those concerned about ITER, this is an area in which I have made science contributions, and can offer inside insights. Due to bungling by politicians, it died. This time it wasn't Bush's fault; he repaired the foul-ups of the Democrat bunglers who killed it.

As a consequence, this ITER has been delayed 15 years, but with Bush's efforts it was resurrected from the dead. It is now is on track, and being built in Cadarache France. Bush succeeded in getting international cooperation. ITER is sponsored by the USA, Japan, EU, Russia, Brazil, Korea, India and China and paid for by all.

As a consequence of delay, ITER has been transformed from a cutting edge experiment, to merely a large scale confirmation of advances already made on a smaller scale. In the ITER interregnum, advances were painstakingly made, in many smaller devices, that were originally research targets for ITER to accomplish.

Fusion is not a question of working. That has already been proved.

It is no longer a question of even breaking even, That has alredy been proved.

It is not a question of even generating net energy beyond break even. That has already been achieved, and proved too.

Small Tokamak devices have generated as much as 15 megawatts of energy over break even, much more than any windmill or solar installation ever did or does. So it has worked, and will work better when scaled up.

ITER will generate 700 megawatts of thermal energy equivalent to a small fission Nuclear plant. All without any of the problems, (little radioactivity, no possible meltdowns, and no long term waste storage problems) of Nuclear fission power.

That is why many can be sanguine about the future, and smile at the concerns. All the electricity we will ever need can now be guaranteed to be availble from clean Fusion. We posters here on GCC, know that ground transport will be converted to emission clean HEVS, PHEVS, and BEVs and sooner than many think. Its inevitable.

Now many say that Fusion won't come until 2050, on a schedule that was constructed on the basis that ITER had a lot of original research to perform, rather than to merely confirm the advances already made, in the interregnumm. The USA has made financial provisions for a "Fusion Breakout" in the late teens, leading to a power plant by 2030. After that it took the US only thirteen years after a similar achievement in 1957 at Yankee Atomic, to get to the point where Nukes generated 20% of the US electrical needs.

No need to worry about Peak Oil, Global Warming, World Poverty, or providing the resources to allow all the world's population to achieve the wanted and vaunted western lifestyle by 2100.

There are other comforting technologies coming into view. Electrification will work for ground transport. It doesn't address air transport, or marine or space propulsion very well. However even here, there seems to be breakthroughs.

Light fusion generators producing massive amounts of electricity with direct conversion to electricity and little need for shielding can now be foreseen. Further away, probably in the 2030's at its earliest, we can see Fusion cycles based on the anutronic He3 cycle, to provide clean motive power for our needs in those applications, and essentially inexhaustible forever.

Posted by: Stan Peterson | May 23, 2007 at 01:36 PM

Kirk,

It was a pleasure to have someone else confirm that efficiency is not measured purely on a mileage basis. Ground transport needs include satisfying many needs, and the wealthy USA has attempted to achieve an optimum mix.

Now many here will question this optimum, but I think the votes of purchasing consumers have selected the optimum by the free choice of millions. Posted today on GCC, is an increase in actual mileage of the US LDV fleet including all the "evil" SUVs, from 15 to 21 miles per gallon over the interval of 1981 to today. Some of that increase in efficiency has been in mileage.

Some people need to maintain perspective. The first successful "small car" in the US was the proverbial VW Beetle. Have you forgotten that its mileage for its 42 horsepower was all of 16 miles per gallon? That's right a lousy 16 miles per gallon.

It's difficult to find the most gigantic and worst mileage SUV, getting only that miserable figure.

Posted by: Stan Peterson | May 23, 2007 at 02:08 PM

Stan:

Dr. Bussard might have a fusion technology that can do the job for a fraction of the cost, and even create electricity without needing to create steam. We should pursue that research with all speed, and if successful, we could replace our coal-fired power plants within a couple decades. Fission plants could be phased out as they reach end-of-lifetime.

Posted by: Cervus | May 23, 2007 at 02:54 PM

For some American’s my self included you will probably never price me out of my choice in vehicle. The affluent will always drive what we fell like driving irregardless of the price. If you can afford the payment on that Hummer 800 a month in fuel is not your worry besides if you own your own company it’s a tax write off anyways so you make money on that 8000lb+ vehicle. I make in the mid 6 figures my partner also makes in the mid 6’s he works for me. So our household is in the low 300’s a year. Seriously stay in college get a degree that is useful in commerce and start a company. My college economics professor told us find a need that people have, and fill it better / cheaper than the existing guy. I have made that my life’s mission and it pays off lucratively. All this climate hysteria is actually good for business. I’m getting rich drilling oil wells because people think that carbon tax is right around the corner, and they want to sell off there mineral profits before they have to pay the government tax man a single cent. Plus oil at 60+ a barrel is making micro-drilling extremely profitable. We live in the high planes of Texas, and I can tell you it’s a drilling frenzy right now. Every person with even possibly 10 barrels a day in flow is drilling / pumping like mad. As for my vehicle I drive an F350 4x4 its absolutely critical in hauling around the 1000’s of pounds of seismic equipment, computers ect. to do wildcatting. Our rig runs on Diesel gensets since the nearest HVAC power maybe a hundred miles away. Off highway diesel is no subject to road taxes anyways but even $8+ a gallon in fuel cost would just be written off as operating expenses and deducted from our NOI, since in Texas corporations are taxed on net profits not gross income. We just pass on the costs to the customer or eat it as a write off come tax time. Since we work in the field our bueness trucks are our personal trucks as well. Loop holes loop holes loop holes it’s the American way. If you don’t like a law find a loop hole around it.

Posted by: Wildcatter | May 24, 2007 at 09:38 PM

From: muritope
Date: 29 August 2007 at 07:15 PM

FROM BARRISTER MURITALA GBADAMOSI


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Posted by: barrister muritala gbadamosi | August 28, 2007 at 04:17 AM

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