Diesel Prices to Stay Elevated as Europe Struggles with Refining Capacity

The recent surge in oil prices has been met with confusion as crude oil prices have not reached record highs. However, petrol and diesel prices remain high due to factors beyond just crude oil costs.

Brent crude, the international benchmark, has traded between $73 and $126 a barrel since February, but European fuel prices are driven by refining and product supply issues, not just crude supply problems.

According to Sumit Ritolia of Kpler, 'the key reason for the widening gap between crude and European fuel prices is that this is increasingly a refining and product-supply problem rather than simply a crude-supply problem.'

European fuel inventories are low, while conflicts in the Middle East and attacks on Russian refineries have disrupted global supplies of refined products.

The ongoing energy crisis has led to higher inflation rates, with eurozone inflation rising to 3.3% driven mainly by higher energy prices.