Travel, 11.04.2024

Petrol price higher than for a long time

The price of petrol at filling stations is currently very high - sometimes more than CHF 2 per litre: why is this,  and how it is now developing

Petrol prices at Swiss filling stations have been rising for weeks, and drivers must be prepared for further price increases. This has to do with global conflicts - but also with the water level on the Rhine.

Drivers in Switzerland currently pay an average of CHF 1.90 for a litre of unleaded 95 petrol, according to the latest petrol price index published by the Touring Club of Switzerland (TCS). The price has risen steadily in recent weeks, and is now as high as it was last autumn.

Some petrol stations are charging even higher prices, as shown by the TCS petrol station map. At the A1 service station in Würenlos, Aargau, a litre of unleaded 95 costs CHF 1.96. The same price is charged at a petrol station on the A1 near Grauholz in Bern. At CH 2.29 and CH 2.37 Swiss francs per litre, the two petrol stations on the Gotthard motorway in Airolo and Piotta in the canton of Ticino even break the two-Swiss franc mark - and they are not isolated cases.

On the other side of the price scale, the cheapest petrol station is currently in Moutier BE, and charges CHF 1.65.

Expensive fun: petrol costs have risen recently. This is likely to continue.                  Photo: Christian Beutler

So the good news for motorists is that it pays to compare. The bad news, however, is that prices are likely to continue to rise on average. On Friday, Brent crude broke through the USD 90 per barrel mark (a barrel is equivalent to 159 litres) for the first time since 27 October.

Fears of a further escalation of the Middle East conflict are likely to play a role in these increases. Last Thursday evening, Israeli Prime Minister Benjamin Netanyahu threatened consequences in the event of an Iranian attack on his country - Iran had previously threatened retaliation for a suspected Israeli airstrike on a building belonging to the Iranian embassy in Damascus.

The Swiss Franc is weakening
The fact that global politics is also making itself felt at the petrol pump is not a new phenomenon. But this is not the only factor. According to a recent analysis by the Swiss company Moveri, which operates the BP, Ruedi Rüssel and Miniprix petrol stations in Switzerland, there are many other reasons. The text from Thursday stated that the expectation remains "bullish": the oil price is likely to continue to rise.

In addition to the conflict between Israel and the Islamist terrorist organisation Hamas in Gaza, the global reduction in oil exports is also playing a role, as is the interest rate strategy of the US Federal Reserve. The ‘Fed’ recently maintained its high interest rates, and, on 20 March, decided for the fifth time in a row to leave the key interest rate in the range of 5.25% to 5.5%. It did hint at interest rate cuts, however.

The price of petrol in Switzerland is also influenced by exchange rates. In recent weeks, the Swiss Franc has weakened again against the US dollar. While one Swiss franc was still worth USD 1.19 in December 2023 - a historic low - it is currently worth around USD 1.11.

Rhine freight is likely to become expensive
Another reason for rising petrol prices in the future is the transport of fuel to Switzerland, most of which takes place via the Rhine. As Moveri wrote, prices for Rhine freight will "inevitably rise", and are likely to peak in the summer. The current price is still CHF 16 per ton, but prices last year rose to up to CHF 80 per ton when the Rhine was at its lowest level.

In purely mathematical terms, this difference alone amounts to 5 Rappen per litre, according to Moveri. In the past, however, prices for Rhine freight have also climbed to CHF 200 per ton. The lower the water in the Rhine is, the less can the ships be loaded, which makes the transport more expensive.

The Frankfurter Allgemeine Zeitung newspaper also cites Russia's ongoing war against Ukraine as a factor in rising petrol prices. The fact that the price of diesel has recently risen somewhat less is not surprising: because the demand for heating oil, which is very similar to diesel, falls at the end of the heating season, it is often the case that diesel prices fall in relation to petrol prices in spring. The gap is still significantly lower than the long-term average, however. According to the TCS, a litre of diesel currently costs an average of CHF 1.99.