PRA comments on fuel price disparity

“Following the steep rise in diesel prices, drivers are now paying 5ppl more to fill up, as a gap opens up at the pump between unleaded petrol and diesel”, comments Brian Madderson, Chairman of the Petrol Retailers Association (PRA).

The underlying reasons for this are that Gasoline prices have recently risen at a slower pace than diesel prices, as the refined oil products markets absorb the impact of the rally in the global prices of crude.

This is due to weak demand for petrol imports primarily in the US, with only one vessel leaving Europe to go across the Atlantic in the past seven days according to Platt’s.  Demand from West Africa - another outlet for European petrol -- was seen as tepid this month. This lack of demand comes at a time in which regional demand in Europe seasonally drops after the end of the driving season and the summer. 

Madderson continues, “By contrast demand for diesel remains strong due to ongoing planned and unplanned refinery maintenance across Europe, as well as increasing seasonal demand, typically associated with the onset of winter.

“Also adding pressure on the weakness of petrol relative to diesel is the change in the underlying specification adopted in Europe in the winter, which sees the retail market shift from the typically more expensive summer-grade petrol to winter-grade. 

“By contrast, diesel grades move to more expensive specifications, whose properties that can resist the impact of the lower winter temperatures”.