Russian diesel import ban could drive up prices soon
Filling up with diesel could become more expensive again in the near future. This is due to a European import ban that came into force this weekend. Much of Europe's diesel fuel was still sourced from Russia in recent months. Nevertheless, experts believe that the impact of the sanction will be less than expected.
Oil expert Mark Williams of the consulting firm Woodmac believes that the price of diesel will certainly rise again. However, he doesn't expect the Netherlands to return to the extremely high price levels of last year "when the market panicked" any time soon.
Shortly after the outbreak of the war in Ukraine, Dutch motorists had to pay 2,375 euros for a liter of diesel at times. After the government lowered the excise tax, this price reappeared a few times due to pent-up demand, but now the price here is much lower.
European Union countries have already stopped importing crude oil from Russia since December 5. This now also applies to petroleum products from Russia, such as diesel and kerosene. The aim of these measures is for Russia to receive less money for its war against Ukraine.
Expert Paul van Selms of the consumer collective UnitedConsumers does not expect any major consequences. In fact, large diesel stocks have already built up recently. The recommended price of the major oil companies has even dropped a little in the Netherlands in recent days, to 1,890 euros per liter.
Furthermore, Eugene Lindell, an expert at Facts Global Energy, also does not believe that the diesel market in Europe will dry up due to the loss of supplies from Russia. "There are enough volumes in circulation, it's just a matter of realizing the potential," he said.
In The Hague, the government recently put in place a contingency plan in case of a sudden major shortage. Energy Minister Rob Jetten presented that plan to the Tweede Kamer on Friday. However, he noted that oil prices appear to have been "barely affected" by the sanctions since the import ban took effect on December 5. Issues such as China's coronal policy and concerns about a possible recession are much more crucial, according to Jetten.
For now, Russia itself sees no reason to cut production of diesel and kerosene in response to the European import ban, Russian Energy Minister Nikolay Shulginov said on Friday. So far, Russia's oil sector has proved resilient despite Western sanctions imposed last year. That's partly because the Russians still have big buyers in countries such as China and India.
Reporting by ANP