FT: Diesel surge costs European drivers €203mn per day

Europeans are spending an extra €30 on diesel each time they fill up, as the continent endures the biggest impact from high prices for the fuel of any major economy, new analysis shows, Financial Times writes.

“As we are running our road transport on internal combustion engines, we’re reliant on a very volatile commodity that we have no control over. Electrification can make us more resilient in crises,” said Juliette Egal, principal data analyst at T&E.

EU has set a target of doubling its electrification rate by 2040 to 46 per cent of demand. Greater electrification could cut global energy import bills by more than $400bn, according to a report by the International Energy Agency published on Tuesday.

Commission President Ursula von der Leyen said last week that imported fossil fuels had cost an additional €90bn since the beginning of the Iran war, ‘‘without a single molecule of energy added’’.

However, governments in Europe also want more EU action to lower the costs of diesel and petrol at the pump.

French President Emmanuel Macron has called on Brussels to “temporarily and exceptionally” weaken specifications on fuel quality in a letter sent to von der Leyen. France has almost a fifth of all diesel cars in Europe, according to data from car trade body ACEA.

Macron said this would increase output of European refineries by 5 to 20 per cent, based on consultations from French refineries, and noted that the EU previously loosened restrictions during the Covid-19 pandemic.

He also called on the EU to remove restrictions on the use of biodiesel, enabling distributors to make use of the B10 mix, which contains 10 per cent biodiesel, instead of the standard B7.

The European Commission declined to comment on Macron’s demands but spokesperson Anna-Kaisa Itkonen said: “The main point is that as long as we are dependent on imported fossil fuels, our energy prices continue to be volatile . . . We are ready to consider other measures.”

Europe’s vulnerability to diesel prices is a legacy of policies that encouraged the fuel’s use in the 1990s and 2000s, as its greater efficiency led to fewer carbon emissions and lower costs for motorists than petrol.

This trend was slowly abandoned as air pollution linked to diesel became clearer, particularly after the Dieselgate crisis that underlined that real-world nitrous oxide emissions from cars running on diesel were far greater than those recorded in testing situations.

However, many diesel cars remain on the roads and four in 10 cars in Europe run on the fuel, T&E’s data shows.

Europe faces a potential total diesel shortage if the US bans diesel exports for 90 days. Europe could lose 420,000 barrels per day (bpd) of diesel fuel, according to European Commission spokesperson Olof Gill.

Diesel imports from the US to the EU have risen significantly in recent years, and the US is currently the largest supplier of this fuel to Europe. In August, the United States supplied 420,000 bpd of diesel to EU countries and the UK, accounting for more than half of the region's total diesel imports. According to the European Commission, the US share of EU diesel imports was estimated at approximately 50% in August.

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