Why Diesel Is Still Expensive in Germany Despite Lower Oil Prices

Introduction

If you have been filling up a diesel car in Germany lately, you may have noticed something frustrating: global oil prices have fallen considerably since their wartime highs, yet the price at the pump barely seems to reflect that. For expats who commute by car, run a small business that depends on transport, or simply budget carefully for monthly expenses, this gap between crude oil prices and what you pay at the station is a real financial concern. Understanding why this happens can help you make smarter decisions about transport and budgeting.

Why Oil Price Drops Do Not Always Reach the Pump

Crude oil is only one component of what you pay for diesel. Between the oil well and your tank, there are refinery costs, logistics, retail margins, and — crucially in Germany — a substantial tax layer. German fuel taxes include the energy tax (Energiesteuer) and VAT (19%), which are fixed amounts that do not shrink when oil prices fall. This means that even a sharp drop in crude prices only affects the pre-tax portion of the pump price, which is a minority of what you actually pay.

Refinery margins have also played a role. When crude oil fell, some refineries kept processing margins elevated, absorbing part of the would-be price reduction before it reached consumers. Limited competition among major fuel retailers in certain regions compounds the problem.

The Diesel-Specific Problem

Diesel has its own structural issues. European diesel demand remains high — especially from freight and logistics — while refinery capacity optimised for diesel production has not kept pace. Post-pandemic supply chain disruptions and the gradual shift away from Russian energy sources have also affected diesel supply chains more than petrol. The result is that diesel prices have been more resistant to downward pressure than petrol prices, even when the underlying oil price moves in consumers' favour.

In Germany specifically, diesel has historically been taxed slightly less than petrol, which made it attractive. But the gap has narrowed, and drivers who switched to diesel vehicles expecting long-term savings are now finding the economics less favourable.

What This Means for Your Budget

For expats commuting by car, the practical impact is straightforward: do not expect significant relief at the pump in the short term. It is worth comparing prices using apps like ADAC Spritpreise or Mehr-Tanken, which show real-time prices at stations near you. In Germany, prices are typically lowest in the evening (between 18:00 and 22:00) and highest in the morning rush hour. Even small differences per litre add up over a year of regular fill-ups.

If you are considering a vehicle purchase, the continued high cost of diesel is one more factor to weigh alongside potential driving bans in low-emission zones (Umweltzonen) that still affect older diesel vehicles in some German cities.

Frequently Asked Questions

Why does Germany not reduce fuel taxes to help drivers?

Fuel tax cuts are politically and fiscally complex. Germany reduced fuel taxes temporarily in 2022 (the Tankrabatt) but the measure was considered expensive and its benefits were partly absorbed by retailers rather than passed on fully to consumers. The current government has not announced a similar measure.

Is there a way to compare diesel prices across petrol stations in Germany?

Yes. The Markttransparenzstelle für Kraftstoffe (MTS-K), run by the Federal Cartel Office, requires petrol stations to report price changes in real time. Apps like ADAC, Clever Tanken, and Mehr-Tanken use this data, allowing you to find the cheapest option near you before you drive.

Conclusion and Next Steps

Diesel prices in Germany are unlikely to drop sharply in the near future, even if oil markets stay calm. Structural factors — taxes, refinery margins, and supply dynamics — keep prices elevated regardless of what happens to crude oil. As an expat driver, your best tools are price-comparison apps, flexible timing of fill-ups, and a realistic budget that accounts for continued high fuel costs.

Source: Tagesschau