Mediterranean Diesel Prices Soar Amid Global Shortage

The global shortage of diesel has pushed prices on the Mediterranean market to a record high of $1,665 per ton in September, driven by geopolitical tensions and supply chain restructuring. While crude oil prices have stabilized somewhat following a drop in Middle East tensions, the effect on drivers in Serbia and the region remains limited.

Prices in the region

Prices in Croatia offered small relief to motorists starting October 6. The liter of gasoline costs a maximum of €1.74, and diesel costs €1.84, two cents less than the previous week. Unofficial estimates suggest that by October 13, eurodiesel could become two cents cheaper, settling at €1.82, while gasoline prices remain unchanged.

In Montenegro, the price of Eurosuper 95 rose by two cents to €1.77 between October 6 and 12, and eurodiesel rose by one cent to €1.96. In Bosnia and Herzegovina, the average price of diesel on October 8 was between 3.73 and 3.74 KM per liter (about €1.91), which is five pfennigs less than a week earlier but about 8% higher than a month ago.

Super 95 in Bosnia averages around 3.39 to 3.40 KM (about €1.73), with a one pfennig increase compared to the previous day. Prices are not administratively capped, and price differences between stations can reach up to 90 pfennigs.

In North Macedonia, diesel is now cheaper than gasoline. As of October 6, the maximum prices are 98.50 denars for BS-95 gasoline (about €1.60) and 97 denars for eurodiesel (about €1.58). Diesel became three denars cheaper, and gasoline 1.50 denars cheaper. The prices include reduced VAT on diesel (10%) and a reduced excise duty of four denars per liter.

In Serbia, the situation remains stable. World and regional fuel movements did not affect prices in Serbia this week. The price of a liter of BMB95 gasoline remained at 207 dinars, and a liter of eurodiesel at 236 dinars. These prices have not changed for four weeks.

The Government, in a technical mandate, extended reductions in excise duties by an additional 25% in mid-September. This was enabled by an amendment to the Excise Duty Law and the elimination of the intervention limit (previously the limit was 20%), which also prevents price changes.

European and American struggles

Diesel prices in the UK are 40.5% higher than in late February, before the US and Israel attacked Iran. Filling up an average family car’s tank costs around £110, nearly £32 more than before the war. Britain relies on the US for about 30% of its diesel imports, with most of the rest coming from continental Europe. Reserves cover about 42 days of consumption.

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In France, the average diesel price was €2.356 per liter in the week ending October 2, slightly below the mid-September record. Daily measurements by the independent portal prix-carburant.eu showed €2.347 on October 7, making France the most expensive of the three major European markets.

Germany’s average diesel price dropped from €2.409 to €2.233 per liter, a decrease of 17.6 cents, according to ADAC. This reduction is due to the energy tax cut (“Tankrabatt”), effective from October 1 to December 31, expected to lower prices by nearly 17 cents per liter, including VAT. ADAC estimates that the relief for diesel is mostly passed on to consumers but sees room for further reductions.

In Italy, the average self-service diesel price is €2.244 per liter, and €2.267 on highways, as of October 6 (Ministry of Enterprises). Rome’s system is changing: a state excise discount of 6.1 cents per liter expired at midnight between October 5 and 6. The government announced “flexible excise taxes” without a fixed amount. Eni raised its diesel price cap from €2.19 to €2.25, while gasoline remained at €1.99. IP and Q8 also introduced limits, but Q8 did not disclose the amount.

Diesel Pricing Mechanisms in Serbia

In Serbia, retail fuel prices are determined by the Decree on Fuel Price Restrictions, introduced in February 2022 and subsequently amended. The latest extension, on August 19, is valid until mid-October. This decree mandates that derivative prices are based on the average wholesale price set by the Ministry of Energy and Mining.

The wholesale price is calculated using the average wholesale price in Serbia, plus an approved retail margin and VAT. It does not consider the domestic refinery’s factory price, as the refinery has been inactive for two months due to a lack of oil supply. Instead, it relies on the average price quotations for a specific fuel type on the Mediterranean market (PLATTS CIF Mediterranean, for the port of Đenovi/Lavera).

Retailers of motor and other fuels at supply stations are required to apply the determined retail prices for oil derivatives immediately upon publication on the official website of the Ministry of Internal and Foreign Trade.

Across the Atlantic

In the US, the average diesel price was $6.20 per gallon on October 5, about €1.43 per liter, down 18 cents per gallon from the previous week but roughly two-thirds higher than a year ago. On the West Coast, prices reached $7.23 per gallon (€1.66 per liter). US diesel is cheaper primarily due to significantly lower taxes than in Europe.

As winter approaches, demand typically rises. The question remains whether collective reserve releases will suffice. Brent se sada kreće oko 100 dolara po barelu, a analitičari upozoravaju da rafinerijski kapaciteti i nizak nivo zaliha dizela ostaju glavno usko grlo.