why the price of diesel could go up again – WWN

On Sunday 5 February, another embargo against Moscow is triggered after that on crude oil imports by sea of ​​5 December 2022. In fact, the EU sanctions on petroleum products come into force, therefore not on crude oil but on its ready-to-use derivatives, such as diesel. Another stop that could lead to further increases in diesel prices, which have already increased in the last year and are higher than petrol (self-service super costs an average of 1.879 euros per litre, diesel 1.914 euros, according to data released by Staffetta Quotidiana on February 3). Russia is one of the main producers, as the oil it extracts is particularly dense and therefore more suitable for producing diesel. Europe will lose over a million barrels a day. According to Unem data, in 2022 Europe imported a total of about 80 million tons of diesel, of which 25 from Russia, which therefore represents 30% of the total. Volumes that will not be easy to replace. The countries most dependent on imports of Russian diesel are Germany (30%), the United Kingdom (29%), France (27%), the Netherlands (27%) and especially the Baltic countries (50%).

almost autonomous Italy

Italy, on the other hand, is the least exposed country (5%) and since July 2022 it has practically reduced arrivals from Russia to zero. Therefore, there shouldn’t be any problems with product availability at a national level. A “negative” measure that will “further unbalance” the markets, denounced the Kremlin. Let’s start with the numbers and quantities that will be missing. According to Unem data, in 2022 Europe imported a total of about 80 million tons of diesel, of which 25 from Russia, which therefore represented 30% of the total. The most dependent countries are Germany (30%), United Kingdom (29%), France (27%), Holland (27%) and above all the Baltic countries (50%). Italy was not very dependent (5%) and since July 2022 it has practically reduced arrivals from Russia to zero.

Numbers are deceiving

But numbers are sometimes deceiving. «Theoretically – explains Salvatore Carollo, energy expert and analyst for various specialized magazines – Italy does not need anything, because the balance between the diesel produced and that exported is positive. The problem is quality. In Italy we have very strict regulations on fuels and with the products that leave our refineries we are unable to completely satisfy the demand: therefore we do not have an absolute lack, but a lack of diesel of the quality required by the market, which we previously satisfied with the Russian diesel. Not only is Moscow a large producer, but it offers quality diesel». And the diesel that Europe is buying to replace it, coming from the Persian Gulf, is not only of worse quality because it contains more sulfur, metals, aromatics, naphthenics, but also because it costs more.

Higher transport costs

«This – adds Carollo – because Russian crude takes one or two days to reach the Mediterranean, while that coming from the Gulf must make a 15-day journey, because it passes through the Suez Canal and, in the case of larger ships, must circumnavigate Africa. Transport costs, which affect the final price, are higher». This is why the stop, which could lead to further price increases for diesel, which has already increased in the last year and is higher than petrol (in self-service super costs an average of 1.879 euros per litre, diesel 1.914 euros, according to data released yesterday by Daily Relay). Should we expect price hikes as early as Monday? «I believe that in the immediate future – comments the president of Unem Claudio Spinaci – the embargo has already been anticipated and absorbed by the markets. So, in the short term, I don’t expect big flare-ups on prices. We are also seeing it these days with declining prices on international markets. However, there may still be some tension due to the general climate of uncertainty».

Stocks

There will be no end of the world according to the general secretary of Assopetroli-Assoenergia Sebastiano Gallitelli, because there has already been an increase in the cost of diesel on international markets and now the price is falling. The market – he said – «has already discounted this concern in the past months: operators have already made their rush to purchase, restoring their stocks and in the last week the international reference for the cost of diesel is gradually planing. Today’s odds are lower than last year. No one has a crystal ball, but we’re hopeful.” At the European level, however, to avoid future shocks, it will be necessary to find a structural and lasting solution, which is able to make up for the 30% of imports that the EU took from the Russian Federation».