Diesel tends to be cheaper than gasoline. Now it’s the other way around. This is due to the war in Ukraine and the reduced refining capacity.
Nowadays, diesel often costs NOK 2-3 more per liter than petrol.
– Global shortage
– The increase in prices is due to a global shortage of diesel. It comes partly because of the war in Ukraine, but also because the world has lost 3.5 million barrels a day in refining capacity since the pandemic, says Nadia Martin Wiggen, an energy analyst at Pareto Securities.
Because even if there is enough crude oil in the world, there is not enough capacity to produce diesel, if you ignore China.
– And the Chinese are not driving at full capacity, which is probably politically motivated, Wiggen tells VG.
The whole world, with Germany at the forefront, is also using diesel to create electricity and heat instead of expensive gas as they have done in the past. It also contributes to the increase in demand, says the energy analyst.
As a number of refineries were closed in both Europe and the United States when demand was lower during the pandemic, Western countries became increasingly dependent on diesel imports from Asia and the Middle East, explains Wiggen.
– Fears the increase in taxes
The Norwegian Automobile Association, NAF, is concerned.
– It’s easy to forget, but more than four out of ten passenger cars on Norwegian roads are still diesel cars. It is particularly in rural areas that the share of diesel cars is high, says Thor Egil Braadland, contact authority of the NAF.
He believes that the high price of diesel is in practice a double district tax, because diesel cars are more common in the district and public transport here is less developed.
– We fear raising and not lowering commissions after SV has finished negotiations with the government, says Braadland and points out that SV in its alternative state budget on Friday he proposed that it should cost NOK 1,526 more per year to drive a diesel car and NOK 701 more for gasoline cars.
– It is entirely possible for the government to cut taxes when fuel prices are so high. In Sweden, they gave cash support to all car owners who received a thousand crowns in hand, while those in the districts received an extra 500 crowns, Braadland says.
In our neighboring country, the difference between diesel and petrol is even greater.
– In Sweden there is a difference of six or seven crowns. They probably have a lot more bio in their diesel. Organic makes it a more environmentally friendly product, but it is also a scarce product and therefore the price goes up. It could also be that different countries operate under different purchasing arrangements, says Kristin Bremer Nebben, chief executive of Drivkraft Norge, formerly the Norwegian Petroleum Institute (NP).
– The war in Ukraine
Knut Hilmar Hansen, Communications Manager at Circle K, points out that the price of diesel is now higher than the price of gasoline across Norway.
– The reason is that the purchase price of the pre-refined diesel has risen more than the purchase price of the pre-refined gasoline.
Hansen points out that they buy fuel in an international market.
– The war in Ukraine and the energy crisis in Europe affect the prices, both of gasoline, but not least of diesel, he writes in an email and adds that there is a narrow international market for pre-refined fuels and a lot of nervousness in the international market.
– Furthermore, we know that Russian oil, which is being phased out from European refineries, was suitable for diesel production. All of this has not been replaced and this means that diesel has to be purchased from other places and refineries. It also affects the purchase price of diesel, he adds.
It is not the first time that diesel costs more than petrol.
– It has already happened and will happen again. We have to remember that these are two different products that are produced differently in refineries, says Hansen.
Finally, he points out that local price wars between stations often help narrow the price gap between gasoline and diesel.
