Wholesale diesel and heating oil sales in Germany continue to rise this year and supply is ample, particularly along the Rhine river. But demand remains weak compared with this time last year making imports uneconomical.
Diesel demand is rising seasonally because of warmer temperatures and an associated uptick in agriculture and construction activity. Heating oil demand is being boosted by falling prices, which are as low as they were in December even with the increased German greenhouse gas (GHG) reduction quota and CO2 levy in place since the turn of the year.
In the Rhine areas of western and southwestern Germany, the price of heating oil and diesel is lower than it is in northern, eastern and the southeastern Bavaria regions. This suggests that, partly because of ample refinery production in the west, available product exceeds current demand.
Low Rhine water levels since the beginning of March, which reduce barge loadings upstream from Kaub, have not led to shortages. Another indication of low import demand is that freight rates have risen only slightly despite the low water levels and some canal closures. Argus' calculations show spot imports from the Amsterdam-Rotterdam-Antwerp (ARA) hub along the Rhine would currently be loss-making.
Maintenance work at the Bayernoil consortium's 215,000 b/d Vohburg-Neustadt refinery north of Munich, which started in early March, is leading to the highest regional prices in Germany. Traded spot volumes are correspondingly low.
Gasoil imports by sea cargo into northern Germany are at their lowest level in at least two years. This could contribute to the price in northern and eastern Germany being somewhat higher than in the west and southwest.
German diesel demand in 2025 remains below average in a multi-year comparison. The main reason for this is declining industrial production and a resulting decrease in freight activity. The German truck toll index fell to its lowest February value in eight years.
