Why are petrol and diesel so expensive despite crude oil not reaching record highs?

Billy Odell Tucker-Robinson Founder & Host — Banking With Billy Network • Intelligence Network • Data Science • AI Research • World News
Published: 2026-09-05T05:22:18.975Z • Permanent link

Fears of fuel shortages have been building in Europe for months, with prices at the pump soaring to unsustainable levels. The crisis has its roots in the global refining capacity crisis, which has been exacerbated by the ongoing war in Ukraine and supply chain disruptions. In February, the European Commission reported that the region's refining capacity had fallen by 12% compared to the same period last year, leading to a shortage of gasoline and diesel. The crisis has been particularly severe in Germany, where the government has implemented emergency measures to reduce fuel consumption and stabilize prices.

Rising fuel prices have also had a significant impact on the global economy, with inflationary pressure building across Europe. The European Central Bank has warned that rising fuel costs could push the region's inflation rate above 10% for the first time in over a decade. The crisis has also had a disproportionate impact on low-income households, who spend a larger proportion of their income on fuel. According to a report by the European Commission, low-income households are spending up to 30% more on fuel than they did last year.

Industry insiders are pointing to a number of factors that have contributed to the crisis, including a lack of investment in new refining capacity and a failure to diversify the region's energy mix. In the United States, for example, the refining capacity has been expanding rapidly in recent years, while in Europe, the sector has been slow to adapt to changing energy trends. The crisis has also highlighted the vulnerability of the region's energy infrastructure to external shocks, with many refineries and pipelines still reliant on Russian imports.

Fears of fuel shortages are not just a concern for consumers, but also for businesses and policymakers. The crisis has significant implications for the region's economy, with rising fuel costs set to push inflation higher and erode competitiveness. For companies that rely on fuel, such as logistics and transportation firms, the crisis is particularly severe, with costs set to rise sharply in the coming months. According to a report by KPMG, the cost of fuel for logistics companies could rise by up to 20% in the coming months, putting pressure on margins and profitability.

Research communities are also taking notice of the crisis, with many calling for greater investment in new refining capacity and more flexible energy markets. The International Energy Agency has warned that the crisis highlights the need for greater investment in energy infrastructure and more efficient energy use. The agency has also called for greater support for low-income households, who are disproportionately affected by rising fuel costs.

The refining capacity crisis in Europe is not a new phenomenon, but rather part of a larger pattern of vulnerability in the region's energy infrastructure. The crisis has been building for years, with many refineries and pipelines still reliant on outdated technology and inefficient production methods. In the 1990s, for example, the European Union invested heavily in new refining capacity, but the sector has since stagnated, with many refineries struggling to adapt to changing energy trends.