Diesel prices are set to rise.

This piece is going to look at historical price differences between unleaded petrol and diesel in The Netherlands. In the long run the price of crude oil is the main component that affects this price differential. In the short run, state taxes and subsidies affect the price of both fuels. Additionally, environmentally oriented regulations with respect to the level of sulfur in diesel has pushed the prices up and narrowed the difference. Throughout the year there exists some seasonality with winter having smaller price difference, as demand for diesel increases and the price of diesel follows along. 

Unleaded petrol has continuously been more expensive than diesel. In the Netherlands the historical gap has been around 20% and it is getting narrower with time. If in early 2006, petrol was a bit above 25% more expensive than diesel, in 2019 this price differential is 15%. What are the main drivers behind this narrowing?

While the price of crude oil is the main driver of retail fuel prices in the long-run price, differences across countries are due to various taxes and subsidies for gasoline or diesel. During the ending of 2018, crude oil prices have shown shaky signs and the price differential between petrol and diesel is quite unstable.

Crude oil prices have been on the rise for about a year, passing the $80 per barrel level in January 2019. On top of that, supply concerns from U.S. sanctions pushed the prices even further up. In the short run, exchange rates, tax policy, regulations, supply disruptions, and seasonal factors also play a role but these influences are minor compared to crude oil. 

Moving forward, in an effort to decrease pollution from ships, on the 1st of January, 2020, the International Maritime Organization (IMO) will require the sulfur content in marine fuel to drop from a maximum of 3.5% down to 0.5%.

While in Europe these type of regulations began in the early 1990s, the U.S. began to phase in the ultra-low-sulfur diesel (ULSD) only in 2006. Meeting the standards of ULSD requires a substantial investment into equipment to remove the sulfur. In turn, diesel prices went substantially up and the price differential became narrower.

Experts predict that the European average gasoline price is expected to remain relatively stable at around €1.27 per liter in 2019. This average is based on 36 European countries including Germany, the UK, France, Italy, Spain and Russia. The average diesel price is expected to be €1.17 in January 2020, or around 1% more expensive than 2018. In any case, it seems certain that diesel prices are set to rise during 2019, and more significantly than petrol prices.  

Let’s start with the yearly average of oil and diesel prices since 2006. The highest average price of both fuels was noted in 2012 and the lowest was in the aftermath of 2009. The world economic contraction and the lack of local demand pulled crude oil prices down during the financial crisis of 2009 which had an immediate effect on petrol and diesel.

In 2012, higher oil prices, driven by concerns about Iran, have been behind the rising price of petrol fuel. Crude oil prices rose by 12% throughout 2012 and with a recovering economy and an underlying upward trend in global demand, the risks of the price increasing further were high.

Back in 2013, a litre of petrol costed an average €1.78 in the Netherlands, compared with €1.64 in Belgium and €1.55 in Germany. Italy was closest to the Netherlands, with a litre of Euro95 costing €1.73.

Still, the price growth of petrol is nowhere close to that of diesel. The increasing cost of diesel motoring in the Netherlands is partly due to various car-related taxes, which are the highest in Europe. While tax on petrol-driven cars is the second-highest in Europe after Norway.

If we focus on the difference, the figure below can give us more insights. In 2016 petrol was 23% more expensive than diesel, while in January 2019 this gap decreased to a bit above 15%. The lowest recorded difference was that of 2019 but there are eleven months to follow. The second lowest was that of 2008 when both fuels were cheapest.

While the price difference between petrol and LPG has historically remained steady, with petrol being 60% more expensive than LPG, increasing diesel prices are narrowing the gap between diesel and petrol.

Moreover there is a seasonality noticed throughout the year. Fuel oil used for heating homes is made from the same ingredients as diesel fuel. As it gets colder throughout the year, the demand for heating oil rises.

In turn this pushes the diesel price up and narrows the price difference between petrol and diesel further. On average, petrol is 21% more expensive during the period May- September and 17% more than diesel during October- February.

Download the full report: Diesel prices are set to rise.


Port congestion is vital in shipping industry and the dependent businesses. If more ships are anchored waiting, the expected costs of shipping goes up. Felixstowe in the United Kingdom is one of the most efficient ports in the world. However its efficiency has slightly trembled during the last months of 2018. In November, the waiting time for ships at Felixstowe spiked above 1 hour and 15 minutes, signalling increased unease at one of Britain’s most important ports.

Felixstowe is one of the most efficient ports in Europe. It serves three thousand ships each year to unload their containers which will then be distributed around England through its rail and road links connecting the port with distribution hubs. Alternative data from Marine Traffic shows that efficiency of Felixstowe has slightly decreased since Brexit was announced.  Is Brexit already happening for the biggest port in the UK?

Port congestion is the term commonly used to describe the situation where vessels have to queue up outside a port and are waiting for a spot so they can load or offload their containers. The more boats are on queue to enter the port, the higher the congestion rate.

Congestion can be filtered through different ways: Number of vessels waiting to anchor informs us on the weekly intensity of ships that have to wait. This can be filtered down to the number of calls, which denotes the number of ships that call to be informed about the remaining waiting time. Weekly median time in anchorage or at port show central tendencies of waiting time measured in hours.

The best measurement with respect to efficiency is the standard deviation of port or anchoring time.  The larger the standard deviation the higher the risk that a ship can wait longer at a port. Higher deviations on waiting time lower the efficiency and increase uncertainty. A higher deviation of anchoring time would ultimately suggest a higher and more risky port congestion.

On the other hand, The port of Felixstowe is Britain’s biggest and busiest container port, and one of the largest in Europe. More than seventy percent of containers coming through Felixstowe are delivered to what is known as the ‘Golden Triangle’, the busiest economical region in the middle of England.

On top of that, it is one of the most efficient ports in the world with one of the lowest standard deviation of anchoring time. It is startling to notice that the peaks of standard deviations are increasing at this uncertain time for the United Kingdom.

The figure below shows the median number of calls in some of the main ports around the world during the four quarters of 2018. The main advantage of looking at the median instead of the mean, is that the median is not skewed so much by extremely large or small values, and so it’s safe to assume that in this instance, it provides the most accurate value as it divides the sample in two parts.

Felixstowe has a median anchoring time of around 45 minutes which is far better than other ports. During the third quarter of 2018, the port was also the busiest and the median waiting time was over one hour.

The figure below shows the median number of calls per port. As noted, Felixstowe appears to have the second  smallest amount of calls after Kharg. This is an impressive score given the size of the port and the number of ships it anchors each year.

However, when it comes to risk of anchoring time, Felixstowe has been showing some unusual volatility after Brexit was announced.

At no time before, the standard deviation  of median anchoring time was above two hours. In November 2018 this deviation reached above two hours and 15 minutes increasing uncertainty and showing sings of weak efficiency for Felixstowe.

Why might have this happened?

Data viewpoint: During the first and the last week of November two of the highest extremes were noticed in the standard deviation of anchoring time of Felixstowe. A period of frequent extremes can signal that the port cannot predict short run congestion. This indicates an increased unease at one of Britain’s most important port.

A summary table for the year 2018 on the median anchoring time, the average number of calls and vessels and the standard deviation of the median anchoring time is given below.

Download the full report: Is Brexit already happening for Felixstowe?