Retail fuels in brief: how are low Rhine water levels impacting retail markets?

The extreme increase in distribution costs has yet to push retail pump prices higher in Germany as prices remain at record levels across Europe. In Germany, gross fuel retail margins spiked following the introduction of a 14-cent and 30-cent temporary discount to excise duty in April on diesel and gasoline, respectively. Fuel retailers have been slow to pass these savings on to consumers and margins remained at around €0.20 in July. Given these unique set of circumstances, combined with a fall in wholesale prices in recent weeks, diesel and gasoline retail prices have fallen since the start of July through to mid-August. Nevertheless, there are some regional discrepancies, with retail prices for diesel falling to a lesser degree in the South compared to other regions as Rhine barge supply has become restricted. The temporary tax cuts mean consumer prices can still come down further despite a continued rise in freight costs.