Why do diesel prices fluctuate that hard?

Regularly taking a look at the prices per litre at the service stations – something every price conscious consumer does – is enough to realize that the prices of diesel seldom remain stable for a long time. Recently we have even witnessed a historic turnaround, with diesel at the pump being more expensive than petrol. You might start to wonder why the diesel price is actually fluctuating. We list up the various causes.

prix diesel

The factors that influence the diesel price

It may not come as a surprise that the diesel price is subject to the laws of supply and demand. The greater the physical demand for the product (for example in emerging markets such as China), the more the price rises. Even reports about an expected increase in demand are often sufficient to boost prices. In addition, the prices of diesel depend on influences that at first sight have little to do with it, such as tensions in the Middle East.

The cliquet system under scrutiny

Furthermore, the cliquet system – which the government introduced in 2003 to limit price fluctuations – has an influence on what you have to pay for diesel. What you pay at the pump, for the biggest part, consists of a combination of excise duties and VAT. If the price of diesel falls, the special excise duty may be increased according to the cliquet system. In summary: the consumer barely senses the fall in prices.

The government imposes maximum prices

Fortunately, the diesel price cannot just continue to rise: the government applies maximum prices, which are calculated on the basis of the market quotation of the previous day and the dollar exchange rate (since diesel is traded in dollars per barrel and in Belgium is sold in euros per litre) . The maximum price is not just adjusted every day: only when a certain limit is exceeded the maximum price changes and the government communicates about it through media.

Most stations adjust their prices at that moment, but that does not mean that you pay the official maximum price at the pump anyway. In other words, it pays off to compare prices, and there are several tools to help you. You don’t want to waste your energy? You can also drive to the nearest MAES station, of course. You are always certain of paying the lowest fuel price.