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European Gasoline Prices Near All-Time High

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?



John Baldwin

Natural gas prices have fallen and are set to stay low for years due to short term (5 - 10 years) oversupply.

Makes sense to switch to natural gas on financial grounds as well as to get 20% lower CO2 than gasoline.

Hopefully, UK Govt will announce this week that all green waste has to be captured and turned into bio-gas. Its easy to clean this into bio-methane, then run vehicles on it. 2nd Generation bio-fuel, zero CO2. Can't beat it. 228 buses in Lille now run on bio-methane CNG.....every town should and can follow suit...

Kirk Ellis

Every time I read about gas prices in Europe, I'm reminded how various groups in the US advocate raising gas taxes as a method to push people into more efficient electric vehicles, hybrids, fuel-cells, hydrogen ICE, etc.

And then I wonder: Why do people think it would work here when it hasn't worked in Europe ?

There are plenty of technologies -- from li-ion batteries to aluminum oxidation hydrogen on demand -- that are reported as viable if gas reaches $5 gallon.

Well, it has been higher than that in Europe for a long time now, yet these technologies are not being widely adopted there. So what gives ? Why haven't the high taxes on petroleum fuels in Europe ushered in alternatives ?


Good question Kirk. Hopefully some Europeans may reply.


It may not have pushed them to alternatives but it has had an impact on their overall fleet economy. I think we are now seeing the beginning of the switch and part of that is the perception that gas prices may never come down again.

Charles S

It's true that alternative fueled vehicles may not have flourish under high European and Japanese petro prices, however, such a condition is required in order to usher in the transition.

TeslaMotor's fame came during the public heighten awareness of high gas prices. Before that, AC Propulsion also came out with a super fast car, but people are just not all that interested in an EV when gas prices are low. If gas prices are down again, I think Tesla can easily fade away like all the previous EV start-ups.


We should not complain about higher oil prices. It is a blessing because it creates better incentives for the development of green alternatives. Let’s hope peek oil starts really soon (maybe it has already) and let it be a slow one so that we don’t experience dramatic increases in the oil price. A gradual increase with $10 more a year for a couple of years just like the gradual increase we have seen the past 5 years. That will be perfect for the environment and for the economy. The past increase from $20 to $60 did not affect world growth, at all, and neither will an increase from $60 to $120 if it takes 6 years. This would leave plenty of time for people and companies to adapt.

Herm Perez

if gas was $8 per gallon in the States, we would all be driving electric cars by now.. our goverment listens to the people, because they can be replaced or overthrown if needed.


Democracy is a European invention and it is very much alive and still doing well in Europe.

Fuel taxes in Europe are equal for fossil fuels and bio fuels therefore we still need higher gasoline prices to make bio fuels truly competitive. Automotive grade lithium batteries has barely been invented and introduced into the market. They will come like the Think is evidence of but they will be expensive at least $35000 for the super mini Think car that compares with a $15000 gasoline car. To justify this price differential we need much higher gasoline prices or much lower battery prices. It will be a bit of both that will do it.



Over here in Europe, the alternative is Diesel. When comparing fuel economy (a diesel uses about 30% less for the same performance) and fuel price (diesel is 25% cheaper, mostly due to lower taxes) between a gasoline car and a diesel one, the last one is only half as expensive to run as the first.

When you're driving more than say 15000 km/year, it's a no-brainer: buy a diesel. Even the Germans are starting to get the point. New registrations of diesels there are way up.

So, the headline 1,41 Euro per liter for gasoline is less relevant. Here in Belgium I last paid 93.5 Eurocents per liter for diesel while gasoline (RON 95) sells for about 1.25 Euros.


I think the answer is Big Oil controls the politicians; In the U.S. its campaign contributions and false real estate deals, etc. In Dictatorships its a plain pay off. And, I'm sure it ain't any different in Europe. The idea has always been to control the energy market and they have been very successful at it; however, Lately the worldwide demand for car fuel has lessened their control because market forces now figure into the pricing equations.

It is interesting to discover that We import gasoline; I didn't know that and it helps to understand how the demand in Europe will affect the price we pay here. We are now not only competing for raw oil but also for the finished product, gasoline, directly with Europe.

And all the while our Congress and President stand around debating other relative minor issues and taking directions from Big Oil and Big Auto. God help Us!


Slow, continuous price increases, as currently underway, have no real effect on the daily behaviour of consumers.

Just like the frog being thrown into hot water, compared to a frog placed in cold water set on a stove. Only the first frog will leap out of the water in time.

Besides, marketing by european manufacturers continously repeats that there is nothing better than diesel, and by now, some americans are even buying that.
(Just don't mention the short term effects on health, and the black smoke coming out even nowadays when one floors the pedal in such a contraption. To give the manufacturers credit, the black smoke is real thick only, when one modifies the engine ECU (OBD2 Tuning). Interestingly, german manufacturers seem to make it easy to do that (ie, flash the ECU just before the TUV test, than flash it back to have higher agility, more performance, less miles on the odometer).

I'm always wondering why non-local manufacturers have not found this unique selling point so far...


Kirk ,

your answer lies with the big car manufacturers , who are in league with
european governments who take nearly 80 % of the pump price in tax ,
then you have the european free press who depend on our great car
industrys for 40 % of their advertising revenues , and who are all to
quick to pour scorn on any kind of alternative fuelled car unless its
biodiesel or ethanol the list just goes on ............
And meanwhile more and more people get sicker and sicker
living in our smog filled diesel utopia , more and more poor guys get
killed putting the meat on the bush familys table ,and according to
the latest news the world slides futher and further towards the point of
no return !
But never mind its only about 210 days to christmas !


I am continually amazed at the conspiracy-minded folk who post here.


Cervus ,
Try living and cycling around in present day europe , its no fun,
look at the figures for young children , with onset of cronic asthma !
somthing is not right , meanwhile our goverments keep taking the cash
from road fuel !



Yes, higher fuel prices (through taxation) sure has failed in European.

I mean look at the average fleet fuel economy:

US ~21 to 22 mpg
EU ~34mpg

Such a HUGE and pitiful failure, right?

Rafael Seidl

Kirk -

as Lambreja and Patrick have already pointed out, around 50% of new LDV registrations in Europe are diesels. The shift to diesel is the main reason Europe#s fleet average fuel economy has actually improved since the mid-'90s, albeit by too little.

Also, diesels have historically had serious pollution side effects. The new wall-flow DPFs will eventually all but elminate PM emissions from vehicles. However, NOx limits are still 3x those for gasoline cars and won#t be tightened until Euro 6 (2014).

Wrt to alternatives, note that Audi built the first hybrid electric production car (the Duo) back in the '90s, before the Prius even existed. It failed in the marketplace, as did later attempts at super-frugal cars with conventional ICEs (e.g. A2 with all-aluminium body, Lupo 3L). BMW collaborated with the German Space Agency on hydrogen-powered ICEs. All of these flopped in the market for a variety of reasons, including immature technology, mediocre value for money, a still-balkanized car market, etc.

But most of all, they failed because European consumers are much more reluctant to be early adopters of new technology than US consumers are. Over here, you don't get bragging rights for voluntarily making a purchase for some purported common good. Europeans detest free riders, so if something needs to be done about energy security, global climate or any other collective asset, they expect the state to step in and force everyone to do their part. That's a big psychological difference to the US and, why European car makers are doggedly sticking to the tried-and-true strategy of incremental improvements.

In the past few years, some of the most notable have been advances in turbocharging, variable valve trains and direct injection. The fact that the US cannot refine enough gasoline for its own use is working against the introduction of these fuel-saving strategies on A/B/C segment vehicles in Europe, which arguably should be running on gasoline rather than diesel. As indicated, compensating by harmonizing fuel taxes between countries and between these two fuels is proving very difficult.

The upshot is that Europe has to import finished diesel from iffy places like Iran just so virtually the entire US LDV fleet can run on gasoline.


Thank you, Patrick, for correcting Mr. Ellis' statement.

Two factors that enable Europe's fleet average fuel economy to be over 35% better than the US's fleet average:
1. clean diesels (not hype-brids)
2. scarcity of SUV's & other mega-sized vehicles

During the +3 years we were stationed in Europe I was amazed at their ubiquitous clean-diesel vehicles. My family rented numerous diesel versions of the Ford Focus and Mondeo, Fiat Multipla, among others. We averaged between 45-50mpg on the autostradas/autobahns (at rather high speeds) in these cars.

Herein lies why gasoline-electric hybrid (hype-brid) sales have not been strong in the EU: clean diesels are simpler, cheaper, and offer better real-world efficiency. What consumer in their right mind would spend more $$$ for a vehicle laden with batteries (benefitting only stop-and-go economy) that delivers less performance and less efficiency than available clean-diesels?

I was also stationed in energy-conscious Japan for 2 years. The Japanese live and breathe efficiency in all things as they have few natural resources to speak of.

In my travels I noticed one glaring fact: no other country in the world wastes natural resources like the USA does. What gives us the right to transport our ever-expanding waistlines in gas-guzzling +4,000lbs vehicles? (and this is just one example- try housing, urban sprawl, electric, military, etc)

In both European and Asian countries that I have driven in it was refreshing to see that the rest of the world is not yet as glutonous and pampered as we are here in the US.

Personally, I can't wait until +$5/gallon at the pump is the norm here in the US for four reasons. High fuel costs may curb imported oil: 1. Thus reducing our multi-billion dollar trade deficit. 2. Reducing the disposable income of our friendly Saudi, Venzuelan, Iranian, (any given sardonic anti-American group). 3. The extra tax revenue might help us pay down our National Deficit. 4. It will give folks cause to pause before plopping down money on a 12mpg mega-sized vehicle.


Its also worth pointing out that we, certainly in the UK are paying LESS for our gasoline than the Americans just now.

At 95.9p/litre the retail cost before tax is 33.26p/litre.

At $1.98 -> £1, thats $2.49 per US gallon.

In most US states gas taxes are rarely $0.5/gallon so when gas is $3+ per gallon then the pre tax price is cheaper in Europe.

I'd guess that the pre tax price of gas in the US averages about $2.70/gal right now.

So we may pay more in taxes, but we're giving less to the oil companies.

And as someone else has alluded, if the European consumer ever figures out that our high petrol prices are being caused by exporting refined gasoline to the US, then expect to see some major complaining.

It would be interesting to see what our politicians reactions would be to that one.

I drive a very fuel efficient car (petrol fuelled) and I'm beginning to resent the fact that we're not befitting from surplus gasoline refining capacity in Europe as most folk have switched to diesel, simply because inefficient Americans are bidding up the price to import finished product.

The yanks are lucky that we've even got this spare export capacity. If we hadn't changed our light fleet to diesel in the mid-late 90's we wouldn't be exporting nearly as much gasoline and then prices would be even worse.



I'm not looking forward to $5 gas. This will hit the poor very, very hard. I know people who make less than I do who can't afford to drive, but have to in order to go to work.

Europeans may not really understand that. But I think that's mostly because of geography, population density, and quite possibly because they've never been here. This country is huge. I've driven across it, 3,600 miles. And there are vast stretches where mass transit is simply impossible.

Those factors make cheap gas a necessity.

$5 gas will hurt us severely.

Mark R. W. Jr.

High fuel taxes in Europe stem from the enormous influence of the mass transit lobbies, the powerful clout of the environmentalists and and especially the strength of the anti-car movement over there. Yet...they don't seem to be any better off at this point energywise.


This is interesting.

Try living and cycling around in present day europe , its no fun, look at the figures for young children , with onset of cronic asthma ! -- andrichrose

Hey andrichrose: we got asthma too. But I'm not going to suggest you try cycling around here. The ozone and particulates will get you -- if you're not run over by a car first.


There are several reasons that people in Europe don't drive electric or other non-petrol vehicles massively:
1) Dont't believe in that our high tax charges on transportation fuels are used to force customers to switch to more env-friedly energy sources - it's a smoke. That taxes are essentially necessary for social-blown budgets and it's clear that any significant apperance of non-petrol transportation energy sources will be heavily taxed as well, so there's no long-term benefit from switching.
2) Euros are accustomed to make use of public transportation and Europe is denser populated that US. That causes higher usage of public transport, including electric trains.
3) Cars in Europe are smaller and have lower fuel consumption and annual mileage so the overall fuel expenses are lower that would be for US transportation style for the same fuel prices.
4) Alternative fuels are extensively used - particularly in Poland there's vaste LPG-fueled cars fleet. Also, I also could notice great usage of rapeseed oil for diesel heavy trucks - not counted in official reports and completely illegal because this oil is not taxed for transportation usage.


Just to throw this out there: In Japan, where diesels are maybe less popular than they are in the US, the fleet average fuel economy for the country is around 31mpg. Of course their gas prices have not increased as fast as the US but it has always been more expensive to get gas in Japan.



Because of massive switch to diesel cars, European refineries have surplus gasoline refining capacity. So they just utilize it, selling gasoline to US, rather than keeping it idling. In long run it will probably change, because slowly adopting in EU taxation according to CO2 emissions will decrease price difference between gasoline and diesel. Also, direct injection gasoline engines are catching-up with higher thermal efficiency of diesel engines.



Present refinery output is very flexible because of hydrocracking and hydrorefining processes, wich allow to convert heavy HCs to lighter ones. So there's no pression to sell diesel oil even at lower prices as it was in te past, and it's possible to set up the process to accomodate the market demand.

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