Every day we aim to offer you our company's high quality fuels at competitive prices.
What determines fuel prices?
Fuel prices are affected by various factors such as international prices of refinery products (PLATTS reporting on the geographical area of the Mediterranean) which, in turn, are influenced by the cost of crude and refining costs, taxes, the operating costs of downstream companies and retailers, as well as competition in the retail stations' market.
Specifically, the price of liquid fuels in the retail stations is determined by:
A) The cost of purchasing fuels from downstream companies
B) Excise duty
C) Other taxes and charges (RAE, VAT, etc.)
D) Downstream companies' storage and distribution costs
E) Gross margins of companies and retail stations from wholesale and retail sales.
What is the situation in Greece?
In Greece, the amount of tax on the final price of 95-octane unleaded petrol currently stands at over 65%.
Fuel prices can vary significantly from one moment to the next. The main factors contributing to changes in fuel prices are: the rise and fall in the costs of crude and of refinery products (e.g. petrol, diesel, etc.), fluctuations in the euro/dollar exchange rate, and competition between retail stations in the same area.
Price relationship between crude oil and refinery products
Since crude is refined to make various products, such as petrol and diesel, it follows that fluctuations in crude prices will also affect the prices of refinery products.
The prices of crude and refinery products, as stock market commodities, are driven by the rules of the free market. Explained in this section are some of the factors responsible for changes in the prices of crude and refinery products.
Increased demand for crude and refinery products
The demand for crude and refinery products is constantly increasing in particular due to the increased demand from developing countries such as China and India.
Limitations of global oil refining capacity
In order to meet the constantly increasing demand for refinery products, refineries all around the world operate at almost full capacity. In the future, new refineries will have to be built in order to cover this increased demand. One of the factors affecting the rise in the number of refineries is the high level of investment required to construct and operate them. This is further mounting due to the enforcement of increasingly stringent international environmental standards, regarding both the environmental performance of the refineries and the production of cleaner fuels.
Crude supply security
Political instability in the Middle East and Libya continues to give rise to uncertainty as regards the availability of crude and this seriously impacts its price volatility.
Unpredictable / extreme weather phenomena
Extreme weather phenomena, such as hurricanes in the USA, can temporarily decrease global crude refining capacity. This decrease, combined with speculations as to the degree of availability of the refinery products, leads to their global price volatility.
Refinery product prices are affected by seasonal changes in the demand for specific products in the largest markets of the Northern Hemisphere, including USA, Europe and Japan. During the winter in the Northern Hemisphere the demand for heating oil rises, whereas in the summer the demand for petrol rises as people living in the Northern Hemisphere tend to travel more by car due to the increase in tourism activity.
Since the crude and the refinery products circulating in the free market are stock market commodities they may become the subject of speculation. This affects their global prices. In recent years, there has been an increased interest in the oil commodity market, particularly on the part of hedge funds, which has an effect on their price volatility.
Most of the global trading in crude and refinery products takes place in US dollars. Consequently, any change in the exchange rate of a country's currency with respect to the US dollar has a direct and immediate effect on the purchase cost of crude and of refinery products.