Refueling in Austria: How the price of fuel is determined

In any case, the past few weeks have shown what it means when one of the most important transport routes for oil is interrupted. How exactly the promotion of Crude oiltrading on commodity markets and the Petrol and diesel prices at petrol stations are connected, is difficult for many to understand. Here are the five most important questions:

1. When it comes to crude oil prices, Brent is constantly mentioned. What is it anyway and who sets the price for it?

Depending on where it is found, petroleum has a different consistency. Brent is a light, low-sulfur type of crude oil from the North Sea. Due to its composition, it is well suited for the production of gasoline, but also diesel or kerosene, while WTI (Texas) is mainly used for gasoline and Arab Light (Saudi Arabia) is mainly used for diesel. Brent is considered Reference variety. The most important trading venue for this is the futures exchange Intercontinental Exchange (ICE) in London.

2. Who then processes the crude oil and sets prices for fuel?

Crude oil is processed in refineries that often specialize in specific grades. Austria’s only refinery is that of OMV Schwechat. It is very broadly based and covers around 55 percent of fuel production, the rest is imported. The import share for diesel is 58.2 percent, for gasoline it is 31.3 percent, and for kerosene it is only 12 percent. The Selling price However, OMV does not determine the prices at gas stations itself. It arises from the interaction of supply and demand on an international market. Long-term contracts between trading partners – also known as term contracts – are of great importance.

3. Why do prices at gas stations fluctuate so much despite long-term contracts?

These contracts do not set a fixed price, they are also on Price quotations coupled. There are two big international players here, the price information services Platts and Argus. They collect data from individual transactions and set average prices for regions on a daily basis. The exact costs for a constant supply of fuel often only become clear through a total invoice at the end of the month. In order to be able to pay the bill, gas station operators also adapt to daily price fluctuations.

4. Why are the prices different in different countries?

Austria sources its crude oil 55 percent from Kazakhstan13.8 percent from Libya and 12.1 percent from Saudi Arabia. Outages from Saudi Arabia affect the country, but not excessively. Depending on the composition of the suppliers, alternatives must be found, which is the case with a general one Shortage of supply is sometimes difficult. Fuels are also used in countries taxed differently and prices are currently capped to varying degrees.

5. How tense is the supply situation in Austria currently?

„Diesel “We mainly get it via rail from Germany,” says Hedwig DolocszeskiManaging Director of the Energy Resources and Fuel Industry Association. However, diesel production capacities in Europe are rather low. “If Germany has a supply problem, we are next.” When it comes to kerosene, Austria is doing comparatively well. Aviation fuel is already running low at some airports in Italy. There was also no diesel available at some discount gas stations in Vienna on Wednesday. However, this is probably due to the high demand over Easter; according to the WKO, there is no general diesel shortage.