Cost of fuel will plunge in Germany
January 9, 2009
Gas in Germany will plunge to its lowest price in nearly five years Saturday in response to a drop in the Army and Air Force Exchange Service’s wholesale costs for fuel and lower U.S. prices.
Regular gas sheds 20.8 cents a gallon to fall to $1.893 per gallon, the lowest mark since March 2004, while mid-grade gas — also known as "super" — falls to a fraction of a cent over $2.
Premium gasoline, meanwhile, dives 28.3 cents a gallon to $2.131.
A policy that prevents the exchange from losing money on fuel sales had kept prices in Germany rising in recent weeks even as U.S. prices declined, but is no longer in effect for unleaded.
The same policy is still keeping prices in the Netherlands from falling as quickly as they might have.
That isn’t the case in the United Kingdom, where prices have kept pace with the U.S.
ammed into reverse, rising for the first time in more than three months as spot oil prices jumped more than $8 a barrel last week.
That means that in the U.K., prices for mid-grade gas rise 5.7 cents, and premium climbs 5.6 cents a gallon.
Diesel fuel, however, is getting cheaper everywhere. In Germany it drops 26.1 cents; in the Netherlands 2.8 cents and in the U.K. 3.6 cents a gallon.
The euro’s strengthening against the dollar triggered "floor" pricing in Germany, a policy that prevents the exchange from losing money. A number of factors contributed to prices arriving at that floor. While AAFES charges its customers in dollars, it pays its German supplier, Esso, in euros.
Also, the price AAFES pays for fuel in Germany changes once a month, the price AAFES charges changes every Saturday.
When U.S. prices fall too quickly, floor pricing prevents the exchange from keeping pace. The situation is exacerbated when the dollar loses ground to the euro.
According to the Oil Price Information Service, U.S. consumers are spending nearly $1 billion a day less on fuel now than they were in mid-July. Demand for unleaded gasoline has dropped some 20 million gallons a day since mid-July, according to the U.S. Energy Information Administration.