Diesel Price Trend and Forecast

Regional Overview

Get the latest insights on price movement and trend analysis of Diesel in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).

For the Second Quarter of 2022

Asia

Owing to the soaring crude oil prices globally, the Indian Finance Minister announced a 6-rupees reduction in diesel prices to stabilize the domestic market. Diesel prices in India vary from state to state depending on freight charges, local taxes, and excise duty levied by the central government. Towards the end of the second quarter, diesel prices stood at 97.28 INR/litre in Mumbai, whereas in Delhi, they stood at 89.62 INR/litre.

The price in the Chinese domestic arena averaged around 8400-8600 RMB/MT. As crude oil supply was affected, price trends of oil products are anticipated to increase in the upcoming period.

Europe

The ongoing Russian invasion of Ukraine has immense effects on the cost of commodities globally. The soaring crude oil prices amidst retaliatory sanctions tightened supply caused the crude oil and allied products prices to explode, triggering an energy crisis in the European domestic arena. In June 2022, the price of diesel in the UK soared the most, averaging around 196.7 pence/litre in Scotland and Wales.

North America

In line with the European counterpart, the price of diesel in the USA reached an all-time high since the 2008 global crisis. Towards the end of the said quarter, the price averaged 5.783 USD/gallon. The US sanctions against Russia and the heightened freight charges are some of the reasons behind this maximum.

Another reason contributing to this high price is the availability of gasoline at comparatively lower prices. This price difference is due to the tax benefits with the purchase of gasoline, making it more competitive domestically.

For the First Quarter of 2022

Asia

In March 2022, fuel prices were raised for the ninth time in the previous ten days. Diesel prices in Delhi were raised by 80 paise per litre, to roughly 93.07 INR/L, up from 92.27 INR/L previously. Diesel prices in Mumbai rose to 100.94 INR/L. India relies on imports for 85% of its oil needs, and domestic petrol and diesel prices are linked to international rates.

Europe

Diesel prices in Europe had been expected to climb for some time due to new EU laws and penalties on carbon emissions, but the Ukraine invasion and supply constraint have already pushed them to record highs in the United Kingdom and the European Union. The EU is now looking for alternative sources of fuel to weather the storm. Europe is coordinating efforts to enhance diesel trade with countries in the Middle East and Asia.

North America

According to the Energy Information Administration, diesel prices increased on average by 74.5 USD/USG in the week ending 7 March to 4.849 USD/USG, marking the ninth consecutive week of increases and breaking the previous high of 4.764 USD/USG set during the week of 14 July 2008.Prices are likely to continue rising, as US has suspend imports of Russian crude and petroleum products as a result of Russia's invasion of Ukraine.

For the Fourth Quarter of 2021

Asia

In Q-4 2021, average diesel prices in the country were 91.80 INR/L. In October 2021, diesel reached an all-time high, with an average cost of 100.18 USD/L. Prices stayed relatively stable in the fourth quarter, from November 2021 to February 2022, but are still at a high of 90.51 USD/L. Despite worldwide oil price swings, prices held steady throughout the months due to oil firms' choice not to adjust tax rates in the country.

India further decreased the GST on ethanol designed for blending with gasoline from 18%to 5% in December 2021. This was done to reduce the country's reliance on imported crude oil. India currently imports roughly 85% of its oil from other countries to meet domestic demand.

North America

In February 2022, diesel prices in the United States reached a seven-year high of 0.986 USD/L, a staggering 36% increase since December 1, 2021. This price increase halted a nearly equal drop that began in late October. This happened because the viral pandemic's ever-changing state wreaked havoc on both supply and demand, the most recent example being the Omicron strain.

It was accompanied by Russia's military presence along the Ukrainian border, which sparked worries of an impending invasion and its influence on world energy supply. Russia exportsd a significant amount of oil and gas to the rest of the world. If tensions rise to the point of invasion, the supply could be shut off. If Russia invades Ukraine, the US and its European allies would almost certainly retaliate with economic penalties. This might result in global oil and gas shortages, as well as, most likely, higher energy prices.

Europe

Crude oil prices rose in the fourth quarter of 2021, and the situation remained tense because of mounting COVID-19 cases in Europe and the potential release of Japanese and Indian oil reserves. It raised concerns about oversupply as well as sluggish demand.

Concerns that tensions in the Middle East and Europe could spill over into energy markets, reducing supplies from key crude producers such as Russia and the United Arab Emirates, were among the causes fuelling the surge. Another cause was the imposition of a CO2 tax as a result of new climate protection rules in Europe. All these factors were responsible for the increase in the price of the fuel.

 Latin America

Brazil increased the price of the fuel to 3.61 BRL/L from 3.34 BRL/L due to higher crude oil prices globally. Fuel costs in Brazil are rising rapidly, with a year-on-year increase of about 44% at the pump in 2021. The administration is debating whether or not it is necessary to go electric with vehicles so as to reduce the dependence on fuels.

For First, Second and Third Quarters of 2021

Asia

Diesel prices in India were increased 35 times between the end of Q-2 (May) and the beginning of Q-3 (July). The price climbed by 7-8 INR/L in absolute terms. The state-run oil marketing companies had increased the rates due to increasing international crude oil rates. In 2021, international crude oil prices soared to a three-year high after the Organization of Petroleum Exporting Countries and their Allies (OPEC+) failed to negotiate an important agreement on global crude oil output levels. As global demand soared during the pandemic, OPEC+ countries were attempting to adopt an oil output policy to alleviate oil production.

The nations, however, were unable to strike an agreement, causing Crude Oil to cross $77 per barrel for the first time since late 2018. While Saudi Arabia and Russia, both members of OPEC+, were in favor of boosting oil production by 4,00,000 barrels per day from August 2021 through the end of the year, the UAE rejected the plan. In the second half of October, prices in China reached 8,023.2 RMB/MT (USD1,254), up 64.4% year on year. Due to rising new demand as an alternate fuel amid China's coal shortage, diesel became more expensive. A key influence was also the rise in global crude oil prices.

North America

Diesel prices in the United States went from 2.64 USD/gal in January to 3.194 USD/gal in March in the first quarter of 2021. Because of growing crude oil costs, it continued to rise steadily throughout the year. In November 2021, the price of diesel in the United States was 3.73 USD/gal. Crude oil prices rose as a result of rising COVID-19 vaccination rates, reducing pandemic-related restrictions, and a booming economy, resulting in worldwide petroleum demand outpacing supply.

The OPEC+ crude oil production cuts that began in late 2020 were mostly to blame for the slower output growth. In 2021, crude oil production in the United States fell by 0.1 million barrels per day (b/d) compared to 2020 and by 1.1 million b/d compared to 2019. This drop was partly due to cold weather in February and hurricanes in August, but it was primarily due to a drop in investment among US oil producers since mid-2020.

Europe

In France, in Oct 2021, the average price of a litre of diesel had risen to EUR 1.66. Even in Italy, prices reached an all-time high. The high diesel and petrol prices in France and Italy were influenced by the changing footprint of the international market, such as China's greater usage of these fuels to generate electricity, reducing the country's reliance on foreign resources. The lifting of lockdown in countries throughout the world had also put a strain on supply and demand alignment which led to such expensive results.

Latin America

As global oil prices rose in response to the deployment of COVID-19 vaccinations, Brazil's state-owned oil corporation Petrobras raised local diesel prices at the refinery gate in an attempt to preserve import parity. In March 2021, Petrobras increased the wholesale diesel price by 5.5%, bringing it to an average of 50 cents a litre.

It was done to bring domestic fuel prices in line with international markets, ensuring that the Brazilian market is never short of fuel. The price reached an all-time high in July 2021, despite Brazil's greatest consumer price inflation rate in nearly five years. It increased by 3.7% to 2.81 BRL/L. This was in response to the surge in international oil and oil product prices. In October 2021, the diesel price increased by 9.15%, rising to 3.34 BRL/L from 3.06 BRL/L in the previous month.

For the Year 2020

Asia

In India, diesel prices saw a declining trend in the first two quarters, from Jan 2020 to June 2020. The cost abated from 68 INR/L to 62 INR/L. However, from July lockdowns eased and the price rose almost dramatically. It was costing Indians a whooping 80.73 INR/L in July. It was remarkable since, the same year, global crude oil prices fell to an 18-year low as oil demand fell precipitously owing to the Covid-19 outbreak in 2020. The advantages of low crude oil costs, however, were not passed on to Indian citizens. Due to hefty taxes imposed by the central government and states, Indians paid more for fuel despite low international crude oil prices.

The government justified the high excise rate on diesel by claiming that it needed to make up for lost revenue during the pandemic. China also raised its domestic prices by 110 RMB/MT in June 2020, for the first time that year, after decreasing it three times to maintain prices in line with falling world oil costs. It was done to assist state-owned refineries in increasing their utilization rates and recouping their losses. The argument behind this decision was that state-owned refineries had been running at lower rates than their independent peers over the previous three months, and a greater run rate would enable them to earn more profits from the oil demand rebound.

North America

Due to the continued tensions between Washington and Tehran, fuel prices in the United States spiked in early January 2020. At the start of the year, the average retail price of diesel was roughly 3.069 USD/gallon. The rates declined in the third week of the month as global crude oil prices fell following the outbreak of coronavirus.

A declining trend ensued in the US from January to May 2020, when the price was at an all-time low of 2.386 USD/gal. Prices remained relatively stable throughout the year and only began to climb in November 2020. The world was finally waking up from its state-sanctioned coma and the drive to reclaim the lost time and energy was at its apex. In November, the price of fuel was 2.283 USD a gallon.

Europe

While diesel was cheaper in practically every country of Europe in the early months of 2020, the price of fuel steadily increased by the end of the year. Diesel was the most expensive in Sweden (1.5 GBP/L) and cheapest in Bulgaria (0.5 GBP/L). Germany's price at 1.25 GBP/L, were in the midst of the two. The cheap cost can be attributed to the world economy abruptly grinding to a halt.

Latin America

In 2020, the prices declined by 13% compared to the previous year in Brazil. This decrease took place, as in other countries, because of the pandemic related global decline in the cost of crude oil.

Procurement Resource provides latest prices of Diesel. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.