March 29, 2023

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Gasoline and diesel prices have started to rise again. What are the experts’ explanations and what awaits us

After a few months of enjoying small discounts at gas stations, the prices of gasoline and diesel have started to rise again.

Diesel has again exceeded eight lei and is still much more expensive than gasoline. What are the explanations and what to expect in the coming months, we find out at “iBani”.

Prices at the pump rose over the weekend as we got used to rebounds, and are expected to rise further in the period ahead.

How are the prices now?

On average, a liter of gasoline is six lei and 64 money, and a liter of diesel exceeds eight lei. So that’s a few extra bucks over last week, not much.

Here, however, is an ever-increasing difference between gasoline and diesel, a difference that was never seen in the past, it has reached 1 leu and 40 money, and there are several explanations. On the one hand, we are talking about an increase in the price of diesel, because the demand is also higher during this period. As in the spring, there are agricultural activities and contributing to this high demand, especially in the region, is the war in Ukraine. Military vehicles need fuel, which makes diesel more and more expensive.

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Analyst Claudiu Cazacu tells us about the growing price difference.

Claudiu Cazacu, strategy consultant, XTB: It is a trend, from our point of view, which seems to not stop in the short term. This means higher demand for diesel and, at the same time, we have a lower supply, because Romania, like Europe in general, imports diesel. In Romania, we have about a third of the diesel consumed in the country imported“.

Why are gas station prices rising?

The increase in the price of a barrel of oil on international markets also contributes to the recent rise in fuel prices. Quite a lot, in a short time. We are already seeing a 15% increase, just last week. This means that the barrel of oil is approaching 100 dollars again.

The price was propelled by the recent decision by oil-exporting nations to sharply cut production. That made analysts’ forecasts for the coming months worse. A barrel of oil will continue to rise in price, they say, by another 10-15 percent by next year.

An unknown is how the market will adjust in December, when there will be restrictions on oil imports from Russia, and we also depend on the evolution of the dollar. Prices could rise even more than that, but if we are to see not only the empty side of the glass, but also the full side, even the crisis we are going through, the price increases in stores and the risk of recession, could also put a brake on the prices at the pump .

We saw a drop in demand already in the second quarter and certainly from a point, when the budget is limited, the family budget, the personal budget, we think more than once whether to use the car or not, but no not only that, but also economic activity in general, which means distribution, transport, transport of intermediate goods for production, all this transport demand is decreasing when consumption is decreasing.

Lower demand is the result of an economy that slows down or stops, even that is what we expected to happen, tempering the price of gas at the pump. When the price of a barrel of oil increases, the increase is also seen at the pump, in a short time, it can be a week, it depends from one gas station to another.

It is good to know, however, that only part of the price of gasoline and diesel depends on the oil barrel, the rest is excise duty, transport and so on.

How to check prices before filling up your car

In conclusion, we could still see price increases, but by a few percent in the coming months, not as high as a few months ago. It would be advisable to check the prices before filling up the car. And you can compare with apps like this one, Price Monitor. It’s free and you can see prices in real time. Added to this is the reduction of 50 money, a measure that was extended by the Government until the end of this year.

A comparison can be useful because any amount saved is welcome, especially in these times.

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