Gasoline Prices, Economy | New jumps in prices at the pump: – Absolutely j …..

(The online newspaper/ OA)

– It’s absolutely amazing, says Mats Glomstad.

The 21-year-old has stopped refueling in Kallerud and is honestly answering the OA reporter’s questions about how he reacts to the fact that gasoline prices are rising again.

– As a student, I struggle to get up, says Glomstad.

Glomstad, who is actually from Skarnes, is studying cyber security at NTNU Gjøvik. He says he tried to take measures to save money.

– I tried to drive less, but you must have a car. I live two miles from the city center and there is very little public transport. And when you have to take the bus for the first time, it’s often late if it arrives, she says.

Record difference

Over the past week, pump prices have once again taken a new leap upwards and are approaching the highs of a few months ago. Nettavisen recorded diesel prices of up to NOK 27, gasoline prices slightly lower than this.

Furthermore, there is an almost record-breaking difference between fuels, and contrary to what we were used to before, diesel is the most expensive.

– The price of diesel is now higher than the price of gasoline because the purchase price of pre-refined diesel has risen more than that of pre-refined gasoline. But both have risen significantly since late September after a longer period of declining purchase prices, says Knut Hilmar Hansen, communications manager at Circle K Norway.

Since the end of September, the price of gasoline here in the house has increased by NOK 1.40 and the price of diesel has doubled, he confirms.

– You see it at the pumps after a price adjustment and before price wars bring prices down, says Hansen.

French strike and aggregates

It is normal for pump prices to vary during the week. Economics professor Øystein Foros previously told Nettavisen that gas stations “are unlikely to suffer losses” when they reach their lowest level, before prices rise again..

– There are significant fluctuations and global markets are not to blame, says oil and gas analyst Helge André Martinsen at DNB Markets.

But the fact that diesel is now much more expensive than gasoline has international explanations, confirms Martinsen, highlighting several reasons for this:

– We have the situation around Russia, which is a major exporter of diesel-like petroleum products. In addition, a strike by the refineries in France is underway, which is putting pressure on the markets. Stocks of distillates used to produce diesel are now at very low levels.

The strike hit six out of seven French refineries hard, according to the AFP news agency, which reports a fuel shortage and a worsening of the situation after hoarding among motorists.

Gas prices, which are now three times the price of oil, also ensure that in many places it will be more profitable to use diesel generators than to get power from gas, where this is an alternative, says Martinsen.

Therefore, the demand for diesel has also increased as an indirect effect of high gas prices.

Biden, Saudi Arabia and oil

About a week ago, the OPEC + countries, a group of oil-producing countries that includes Saudi Arabia and Russia, decided to cut oil production by 2 million barrels per day.

The decision sparked outrage in Washington DC and an ongoing conflict between the Biden administration and Saudi Arabia, which is usually a fairly stable US ally in the Middle East. More pressure on prices at the pump in the United States may be enough to make Democrats miss the by-election to Congress in early November.

Furthermore, the conflict creates new price pressure in the oil market, and thus also contributes to driving up prices at the pump in this country:

– The conflict with OPEC + contributes to raising the price of oil, but it is not that important for the difference between diesel and oil, explains Martinsen.

Expectations of an OPEC + cut have pushed the price of oil up from $ 84 to $ 94. The oil analyst explains the effect as follows:

– A rule of thumb is that the price of gasoline increases by 70 øre per liter when the price of oil rises by $ 10.

– It will happen again

In other words, both gas prices and the Russian war and production cuts affect prices at the pump. But we will have the situation with fluctuations and large local differences regardless of where the top and bottom of the market are:

– It is true that both petrol and diesel have been below NOK 20 at the pump in many places, and recently around NOK 22, says Knut Hilmar Hansen in Circle K.

Price wars occur in local markets with stiff competition, he points out.

– It is not the first time that diesel costs more than petrol. It has already happened and will happen again. We must remember that these are two different products that are produced differently in refineries.