Less petrol, more diesel and LPG

06/12/2005 14:00

Dutch motorists bought 1.3 percent less petrol and 1.7 percent more diesel in the first three quarters of 2005 than in the same period last year. In the third quarter they also bough more LPG for the first time in years. Total sales of motor fuels in the first nine months of 2005 were at the same level as twelve months previously.

Petrol, diesel and CPI for petrol

Petrol, diesel and CPI for petrol

Diesel accounts for more than half the market

Since 1955, sales of motor fuels have risen from around 1.5 billion litres to around 13.6 billion litres a year.  Petrol is traditionally the most used fuel for road vehicles. From the early eighties, however, diesel has been becoming more popular; since 2000 it accounts for more than 50 percent of the total amount of fuels sold. The reasons for the permanent increase in the demand for diesel are the continuous growth in the transport sector and the increase in the number of cars running on diesel. In addition tax regulations governing car ownership have also probably had an effect.
The market for LPG has been declining since the eighties, but this trend seems to have turned in the third quarter of 2005.

Motor fuels and shares in total fuel use

Motor fuels and shares in total fuel use

More LPG in third quarter

For the first time in years, the amount of LPG sold rose significantly in the third quarter of 2005, although it has not yet reached the level of before 2004. Eight percent more LPG was sold in the third quarter of this year than in the same quarter last year. In September the increase was even more than 20 percent. This observation is in line with reports in the media this summer that more people are building LPG tanks into their cars. Drivers seem to be switching from relatively expensive petrol to cheaper LPG.  

 LPG sales

LPG sales

Dollar exchange rate affects import prices of crude oil 

Crude petroleum is the main raw material for the production of motor fuels. The world market price of crude petroleum in dollars has doubled since 2003.  Because of the dollar’s weak rate, this development has been less noticeable in the eurozone countries. On the other hand, unconnected with the developments on the world market, the rising rate of the dollar in the last two quarters has increased pressure on import prices.

Crude petroleum

Crude petroleum

Excise duties account for half the price of petrol

There are two reasons why the price of crude oil is only partly reflected in retail prices. The main reason is the excise duties (excluding VAT), which account for about 50 percent of the price of petrol. The other reason is that the costs of refinery and of trade and distribution are not affected by the price of crude oil.

Joost Huurman and Henk Verduin