Illustration - Photo: MTI

Government official: European diesel market could fall victim to next phase of oil sanctions

The next phase of sanctions on Russian refined oil products set to take effect in a few days will have a big impact on Europe's diesel market, a cabinet parliamentary state secretary has warned.

The price of diesel well exceeds the price of petrol in several European regions due to tight supply, Csaba Domotor said in a video message on Facebook.

Diesel has a higher market share in European countries than in other parts of the world, he said, adding that Russia had been Europe’s primary source of diesel imports for decades.

Domotor cited an article in the Financial Times on the likely impact of the sanctions, namely that they will lead to price increases and possibly shortages.

He also cited the article as saying that the jump in oil prices would offset the dip in the price of natural gas seen in recent weeks. This, the FT said, could dash hopes that fuel prices had already peaked.

The paper also said that without Russian imports, Europe would have to compete with regions that are “physically closer to the source” and would have to rely on refineries in India and the Middle East as well as exports from China.

“This will hardly be cheaper,” Domotor said. The state secretary cited the FT as saying that diesel supplies in Europe “face turmoil in the months ahead”.

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