German buyers pulled back from the spot market in the week to 25 September ahead of a tax cut on diesel and E5 gasoline due to take effect on 1 October.
The total volume of diesel and E5 gasoline transactions for truck loading reported to Argus dropped by about half compared with the week to 18 September. Many consumers are postponing purchases to benefit from lower tax rates in October, as the expect overall product prices to fall. The federal government will cut the energy tax on road fuels by €14.04c/l on 1 October.
Prices for E5 gasoline, diesel and heating oil all declined but stayed elevated. Fuel prices had reached a new yearly high in the week to 18 September. In the following week, diesel in Germany averaged about €190.6/100l, nearly €4/100l below the previous week's record. E5 gasoline showed a similar fall. The lower domestic prices were driven by falling ICE gasoil and crude futures. Additional regional oversupply towards the end of the month further pushed prices down.
Heating oil transactions reported to Argus also fell sharply, even though heating oil prices in Germany declined as levels remain high. Some traders said certain end-users mistakenly believed the tax cut would apply to heating oil and delayed purchases. But the temporary energy tax reduction in Germany from 1 October to 31 December applies only to gasoline, diesel and HVO100.
