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Why diesel prices are rising and what it means for Europe
DW.com • • world
Key Points:
- Diesel powers key sectors of the economy such as freight, farming, and construction, making diesel price shocks more impactful on inflation and cost of living than gasoline price increases.
- Russian refinery attacks amid the Ukraine conflict have reduced diesel production by nearly 30%, leading Russia to restrict exports and contributing to global diesel shortages and price hikes.
- Europe is highly vulnerable to diesel price spikes due to its diesel-heavy vehicle fleet and dependence on imports, resulting in significant additional costs for drivers, businesses, and the overall economy.
- Diesel prices have risen faster than crude oil prices because refinery disruptions, especially from conflicts in Ukraine and the Middle East, have reduced refining capacity more than crude oil supply.
- Potential US diesel export restrictions ahead of elections could exacerbate global diesel shortages, particularly affecting Europe, while refinery closures and increased winter demand may further tighten diesel supplies.
