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Monday, June 27, 2022

Fuel prices above two euros: is refueling really more expensive than ever? – Economy

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For Robin Hase, gas prices these days are one thing above all else: “Extremely crap.” 2.30 euros per liter of premium gasoline shows the price table on Thursday morning at a gas station in the south of Munich when the mechatronics trainee refuels his car with fresh fuel; diesel costs even 2.39 euros. “In the meantime, you just work so you can afford to drive,” Hase says.

So maybe Saarland Prime Minister Tobias Hans wasn’t so wrong as he was a week ago. posted a selfie video on his Twitter channel, also recorded in front of a gas station. “That’s really crazy,” he says into it and turns back to the price board. “Two euros and twelve! I think a point has really been reached where you have to say, you have to act.” And then follows very harsh words for a politician: The problem, says Hans, is that the state is “enriched” by rising energy costs. “And that’s why a brake on fuel prices is needed,” he demands. Now it’s about talking to the federal government.

But what wiggle room does the state have, and is it really filling more expensive than ever compared to revenue?

In fact, much of the price of fuel in Germany is due to taxes and fees: the tax on energy or mineral oil is 65.45 cents per liter for premium petrol and 47.07 cents for diesel. These amounts are fixed. In addition, there is the 19 percent VAT – at a price of 2.20 euros per liter, which is 35.1 cents – and the CO₂ tax, which, depending on the proportion of biofuel, adds another eight cents per liter. A total of around 84 cents per liter goes to the state for diesel and around one euro for Super E10. The rest of the price -about 137 cents for diesel and about 120 cents for gasoline per liter- is explained, among other things, by the price of raw materials, refinery, transport and distribution costs and the profits of the companies involved. Product costs are likely to be the biggest item right now.

Poland has already significantly reduced taxes on fuel. That’s why gasoline costs about 50 cents less there

When it comes to fuel prices, Germany is usually about 20 cents above the European average. Refueling is only more expensive in Scandinavia, Greece and the Netherlands. Those who can drive across the border to Austria, Poland or the Czech Republic. Prices there are significantly lower than in Germany, in Austria the savings are around 30 cents per liter of gasoline, in Poland you can even refuel for around 50 cents less per liter. In fact, this difference is mainly due to the tax burden.

In Austria, for example, the tax on mineral oil is 48.2 cents for gasoline and 37.9 cents for diesel, which is significantly lower than in this country. The value added tax in the neighboring country, on the other hand, is even slightly higher than in Germany at 20 percent. But also in Austria, taxes on gasoline will be increased significantly from July 2022. The fact that refueling in Poland is particularly cheap is partly due to a temporary VAT reduction: the tax on gasoline and diesel will be recently reduced from 23% to 8% to offset inflation.

Would that also be the correct way for Germany to relieve consumers in the short term? In addition to ADAC, more and more politicians such as Union leader Friedrich Merz or Bavarian Prime Minister Markus Söder are demanding it. According to calculations by the automobile club, a reduction from 19 to seven percent would mean about 22 cents per liter at current prices.

Transportation scientists calculate that fuel used to be more expensive relative to net income

But there are also transport experts who are much more cautious when looking at current fuel prices and who point out that these absolute record figures must be put in relation to income. Even with gasoline prices of around two euros per liter, drivers still have to spend a smaller proportion of their income on refueling than they did ten years ago, says Gernot Sieg, director of the Institute for Transport Sciences at the University of Münster. In fact, the price of gasoline has risen, going from an average of 85 cents per liter in 1997 to 1.54 euros per liter in 2021 and now to two euros. But in the same period, the average net salary of all employees increased from 1,334 euros to 2,088 euros.

Sieg adds technical development. According to this, the consumption of the most economical VW Polo has gone from 6.8 liters per 100 km (year of construction 1997) to 5.31 liters per 100 km for the year of construction 2019. If you sum all this up and assume a annual mileage of 12,000 kilometers, which is just below the German average, shows, on the one hand, that Germans have recently become accustomed to low fuel prices: in 2020, an employee driving a Polo only had to pay the 3.8 percent of their wages spent on refueling. The current jump upwards is therefore all the more violent.

On the other hand, it also shows that over the years the burden of fuel prices has been higher, for example in 2012, when there was a high intermediate point and a Polo driver had to spend 6.5 percent of your salary in gasoline. Under current conditions, this maximum would only be reached again if the price of gasoline exceeded 2.40 euros, Sieg calculates. Their conclusion: “Even if car drivers have become accustomed to relatively low fuel prices and price increases are painful because they reduce consumption in other areas, this cannot be an argument that will play a decisive role in decisions on embargoes.” of oil against war criminals”.

Other traffic scientists like Ferdinand Dudenhöffer of the Duisburg Automotive Research Center warn against “dramatizing” the current price at gas stations: For an average German driver, it’s about 40 or 50 euros more per month, those price “heights” there. they are over and over again, and would moderate again. And what is this additional burden compared to the situation in Ukraine? “Several hundred people are dying there every day as a result of the Russian war of aggression. Big cities are being destroyed,” says Dudenhöffer.

Stefan Bratzel from the Center for Automotive Management (CAM) in Bergisch Gladbach also advises calm. His Direct response to Tobias Hans on Twitter: More than 40 percent of personal car miles traveled are for leisure and vacation purposes. If you drive ten percent less in your free time, you end up with more in your wallet at a price of two euros per litre*. By the way, according to the car researcher, it could also be changed to a bicycle. “That’s not a resignation!”

On Thursday morning, Andreas Bauer stopped at the Munich gas station with his wheel loader, he works in civil engineering. Bauer says that he tries to drive less in his spare time. But for work? “I don’t see riding a bike to work at five in the morning when it’s minus five degrees.”

*Editor’s Note: We have restated Stefan Bratzel’s statement because it was initially vaguely worded. What was meant was that ten percent fewer trips would ease the burden on the wallet, even at current fuel prices.

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