Tuesday, June 6, 2023

What is the reason for the drop in gasoline and diesel prices?

Gasoline and diesel continue to give drivers thousands of pockets in Spain. The prices marked in 2022 are offset by the decrease at the beginning of this year and even diesel once again marks lower figures compared to gasoline. It’s something common these years that was an exception for a good part of the previous year.

The average price of a liter of gasoline in Spain stood at 1,635 European coins last week, which is a decrease of 0.54% compared to the previous seven days, while in the case of diesel cases 1,31%, up to 1,571, which marks the lowest level since the end of February 2022, according to the data from the Oil Bulletin of the European Union.

In this way, the average price of diesel in Spain remains below gasoline for the sixth consecutive week, as it was before the Russian invasion of Ukraine, which made the price of diesel more expensive than gasoline continuously from August 2022. until the middle of February of this year, when this dynamic was broken.

Compared to the first week of 2023, without the 20-percent sum applied by the Government last year, gasoline registered an increase of 3.21%, compared to 5.41% of cheaper diesel.

The biggest decrease in the price of diesel compared to gasoline comes after they registered a greater accumulation of reserves of this fuel due to fears of a major shortage in Europe due to the ban on Russian diesel.

In addition, the main oil companies that operate in Spain have chosen to maintain their 10 cent discount, which may be due to a higher level of credit – to their customers in the first half of the year.

With these price levels, both fuels remain far from the high reached last summer, when in July gasoline is reported at 2,141 euros and diesel 2.1.

Likewise, gasoline and diesel continue for another week below the amount they have designated (1,818 euros in the first case and 1,837 coins in the second) before entering the aid force of 20 cents per liter approved by the Government at the end. March of next year and that, from the beginning of 2023, is reserved only for a group of professionals, in which there are vehicles, farmers, companies of ships and fishermen.

What is the reason for the drop in gasoline and diesel prices?

The reason for this drop in gasoline and diesel prices is mainly due to the fact that the market for the better part of 2022 had the hope of a major shortage of these products after the European Union announced in the summer the ban of all types of the most approved petroleum product. from Russia after the fifth of February, which is the most affected by diesel, since Europe will consume more than 44% of diesel imported from Russia until 2022.

At the beginning of the war, the European Union banned the import of Russian oil, but not refined products. A measure that is also supported by other countries that support Ukraine in the conflict against Russia, such as the US, Japan, Britain, Canada, or Australia. However, oil companies have been able to circumvent this disruption by replacing their Russian supplies with companies exporting from other countries and the market has pushed back its price expectations based on supply and demand.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com/
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