Petrol price is skyrocketing – How is the petrol price structured?
Record high petrol price
According to UnitedConsumers – a platform that tracks fuel prices, among other things – the suggested retail price for a liter of petrol again reached a record high on February 1, 2022: 2,151 euros. There are several reasons why gasoline is currently so expensive. Think of the corona crisis, a trade war between oil producers and the ongoing conflict between Ukraine, Russia and the West.
Gasoline abroad cheap
Naturally, all countries in the world suffer from these issues. Petrol prices have also risen sharply in countries such as Germany and Belgium recently. But why is gasoline still so much cheaper there?
This has of course everything to do with the tax that our government levies on fuels: excise duty and VAT. The excise duty on fuels is a huge source of income for the Dutch State. Our country has 8 million motorists who pay about 4.5 billion euros in fuel excise and VAT.
More than 60% of the fuel price in the Netherlands consists of excise duty and VAT. In 2022, no less than 83.2 cents will be levied on a liter of petrol in the Netherlands. The entire fuel price, including excise duty, is subject to a further 21 percent VAT. The amount of VAT therefore rises as fuel prices rise.
Excise duty continues to rise
The excise tax on fuel has been rising for years. On January 1, 1970, the excise duty on petrol amounted to 16.8 euro cents. Ten years later, on January 1, 1980, the government already charged 23.8 euro cents. In 2022 we will pay 83.2 euro cents in excise duty on a liter of petrol.
|Year||Excise duty on petrol|
|1970||16.8 euro cents|
|1980||23.8 euro cents|
|1990||36.3 euro cents|
|2000||59.7 euro cents|
|2010||72.0 euro cents|
|2020||80.2 euro cents|
|2022||83.2 euro cents|
Build up fuel prices
So about 40% of the fuel price consists of other things, such as the oil price and the profit for the oil company and pump operator:
- 23%: Oil price and refining costs
- 11%: Operating costs
- 3%: Storage and transportation costs
- 46%: Excise duties
- 17%: VAT
In addition to excise duty and VAT, the pump price is therefore determined by the oil price, which can sometimes fluctuate. In 2020, for example, the price for a barrel of oil fell sharply. The reason was the failed negotiations of the oil cartel OPEC with Russia. OPEC is a partnership of fourteen oil-exporting countries. The OPEC countries flooded the market with oil in the spring of 2020 to stifle the Russians. The result? In many places in the Netherlands you could fill your tank for less than 1.40 euros per liter of petrol.
Consumers could only enjoy the low fuel prices for a short time. In 2021, the oil price rose sharply, thanks to the high demand caused by the recovery from the corona crisis. In 2022, the Russians will again cause severe fluctuations in the oil market. Tensions at the border between Russia and Ukraine will cause the oil price to rise further in 2022. In February, oil prices even reached their highest point since 2014, and you can tell at the pump. Do you want to refuel as cheaply as possible in the Netherlands? Then read the article below: